A prize anchor

Greg Wyatt • Apr 11, 2024

This post is somewhat of a thought experiment.


While negotiation can be many things other than price, price is what most of us jump to when we think about ‘negotiation’.

Price is the prize, particularly in the convoluted set of negotiations such as a recruitment process.

By which I mean salary.

Watch this educational video highlighting the dichotomy of the candidate/employer salary negotiation:

Looooool.


Chris Voss talks about setting an extreme price anchor in a pricing negotiation, low if you’re buying, high if you are selling.

Do this and you set the tone for the negotiation, especially if it seems you are doing so for good reason.

The rationale is that negotiations typically meet in the middle, a form of compromise.

The middle point ends up being better than both your budgeted price, and even ideal price. So the compromise is really from the other party, and not a compromise at all for you, because you’ve created room to negotiate.

This tactic takes understanding the salient facts, calibrated questions to gain insight, and chutzpah to keep to the course.

And the goal isn’t to screw other the other party, but to reach an agreement they can commit to and feel they’ve got a good deal.


The funny thing is that elsewhere Voss contradicts himself by saying extreme anchors can deter negotiations.

Certainly, I’ve been put off from further discussion by a price that’s so out of whack I send them on their merry way.

He also talks about emotional anchors and the non-money-related attributes that can cement a deal.

In a career, that might be flexible working, a clear career path, or simply a nice boss doesn’t bully you as much as your last one did.

The contradiction comes from nuance, rather than forgetting himself. Every situation is different, and people negotiate differently or don’t think to negotiate at all.


It’s also fair to say that a rotten apple spoils the whole barrel, and bad experiences tend to inform our assumptions going into similar scenarios.


My question is this.

If the video hilariously shows that negotiation without data is just hot air.

If people rely on salaries to meet their life requirements, making it an essential negotiation point that is often the first point they look for.

If good negotiation requires clear data to reach a satisfactory outcome for all parties.

And if candidates assume ambiguity suggests an extreme anchor in the wrong direction (a lowball).

Why would you rely on vague and negotiation-centric words like

  • competitive

  • negotiable

  • ‘depending on’?

And only disclose the details at the offer stage?


Irrespective of any other discussion point around salary disclosure, as a negotiation statement when attracting candidates - it makes no sense.

From a negotiation standpoint as part of this series, why wouldn’t you lead with clear information on your total compensation? Or at least an explanation of your compensation strategy?

If they aren’t able to see a way to reach a satisfactory outcome from the outset, why would they even apply?

Because the decision to apply is a negotiation with five outcomes -

  • yes

  • no

  • reflect

  • no for now

  • seek more information.

You don’t get a say in that negotiation beyond the words you’ve used.

(Yes, there are many other factors on salary non-disclosure - I go into more detail here.)


While you might not want someone who is money-motivated, money allows us to reach our physiological and safety needs - the base of Maslow’s Hierarchy of Needs.

If a reader can’t see how they can meet those, then personal, cultural, psychological fulfilment may not be a negotiation to be had - those emotional anchors Voss describes.

While in any preview of an advert, you may only see Job title, Salary and location. The same adverts that are the basis of most below-the-line communications.

In a transactional, automated world where we complain about the applications that lack accountability…

it’s the people who read with accountability, we most want to appeal to.

The very same may have a hard stance on salary disclosure, prepared to do the boldest of negotiation plays - to walk away, often without you ever knowing.

Regards,

Greg

p.s. if pt 5 is your first read of this series, I’m using Chris Voss’ “Never Split the Difference” as a lens to look at different aspects of negotiation in recruitment. It’s a book worth a read, particularly if you are new to negotiating.

p.p.s. feel free to buy my recruitment things - filled vacancies, better adverts, process audits, strategic consulting. The price will be very expensive, but I’m happy to haggle.

By Greg Wyatt 18 Apr, 2024
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