What’s Your Best Alternative to Negotiating?

Posted Monday, April 21, 2014

In a failed attempt to lean in, W., an anonymous woman with a Ph.D. in philosophy, asked to negotiate better terms of employment at Nazareth College. Unfortunately, she had her  job offer unilaterally rescinded. Many bloggers have commented on why this happened, ranging from gender bias by the college to narcissism and cognitive errors by the candidate.

Here’s another way to look at the situation: The job market is ripe with people who have a Ph.D. in philosophy. Nazareth College probably had a backlog of candidates with similar credentials. Passing over W. was an easy decision. In other words, the college had a BATNA – a “best alternative to a negotiated agreement“. 

Negotiating With a BATNA

Negotiation is a dance of offers and counteroffers. With a BATNA, you can choose to sit out the dance. You have acceptable options, so you are not forced to reach a agreement with this employer, job candidate, supplier or customer. You can negotiate from a position of strength.

The employer’s perspective. As a hiring manager at Ford Motor Company, whenever I posted an opening, I would receive a stack of resumes. After the HR department pre-qualified the candidates, I might have 100 resumes left. I would quickly discard most of the resumes, then carefully review 10 or 15 resumes before calling a handful of worthy of candidates. I never negotiated starting salary or benefits. If a candidate asked to negotiate, I would have gone to the next person on my list. My BATNA was a large, diverse and desirable pool of candidates, so there was no reason to negotiate.

The job candidate’s perspective. It is best to interview when you already have a job. Then, your BATNA is to stay where you are. If you don’t have a job, try to generate multiple job offers that overlap. When I decided to move back home to Virginia, I still had a tenured faculty position at my previous college. I interviewed aggressively and received four separate job offers. I always kept one job offer “live” until I received a better offer. I eventually accepted an offer at a prestigious college 30 miles from where I grew up.

Negotiating Without a BATNA

If you really have no BATNA, you have no bargaining power. If you must have that blue 1968 Shelby GT 500 on the auction block, expect to pay top dollar. If there is only one acceptable job candidate, expect to pay top salary. If you are desperate for a job, expect to take whatever they offer.

Here is how to negotiate without a BATNA: Act confident, like you have a BATNA. And the best way to be confident is to find your hidden BATNA.

The employer’s perspective. As a hiring manager at Microsoft, I was looking for someone special – big data expertise, specific programming languages, HR business partner perspective and a willingness to live in the drizzle of Redmond. I opened a hiring requisition, but no acceptable candidates were found. Despite having the requisition open for months, I never even interviewed anyone. I preferred to leave the job unfilled (my hidden BATNA) than to hire someone without the full set of skills I needed. I was confident in my own capacity and the flexibility of my team to succeed, even if we had an empty box on the org chart.

Employers always have the BATNA of leaving a position open. A bad hire leads to poor performance and can create a drag on the rest of your team. You never “have” to hire anyone. 

The job candidate’s perspective. As a job candidate, you always have alternatives – hidden BATNAs. I have been known to say “I would rather live in a refrigerator box than do that job.” For graduating students, the alternative to a professional job might be working for minimum wage or going to graduate school.

Whether or not the refrigerator box/Starbucks/grad school is a realistic alternative, confidently acting like you have a BATNA makes you more attractive. I once had a job interview over lunch. While glancing at the menu, the hiring manager started listing his expectations for my work schedule. I told him the schedule was a deal breaker. He insisted that all jobs in our field would have a similar schedule. I confidently disagreed, then selected my entrée. I enjoyed our lunch. Within a month, I interviewed elsewhere (with confidence) and got the job I wanted.

Why did W. go public in her  failed negotiations with Nazareth College? In the firestorm after the original post, W. said “I asked for a less then 20% increase in salary [at Nazareth College]. When I negotiated for another tenure track offer in philosophy I asked for a more than 20% increase in salary and was offered it [emphasis mine].” If the other offer was still on the table when she negotiated with Nazareth College, she had a BATNA – as every job candidate and hiring manager should.

Know your BATNA or find a hidden BATNA to give yourself more negotiation power. And, if you truly don’t have a BATNA, smile and say, “Why yes! Thank you!” to your only choice.