How to Respond to “Take It or Leave It”
Source: Harvard Business Review
By Anyi Ma, Yu Yang and Krishna Savani
Have you ever heard one of these statements in the midst of a negotiation?
“That’s the best I can do. Take it or leave it.” Or, “I simply can’t make any more concessions. Sorry.”
Lots of negotiators use soft ultimatums like these to elicit concessions from the other party, and research shows that they are often successful in doing so. So what can you do when you are at the receiving end of such ultimatums? How can you persist to obtain a better deal for yourself?
Our research identified a surprisingly straightforward way to successfully navigate ultimatums: think about all the choices that you and your negotiation partner have in the negotiation. Or as we think of it, adopt a choice mindset.
Negotiators in a choice mindset received better outcomes in the end. Indeed, we found that the choice mindset improved negotiation outcomes in a wide variety of contexts, such as buying a used car, negotiating a job offer, and negotiating a B2B sale.
Nick’s take
You get a job offer. You try to negotiate it. They tell you they can’t or won’t. Take it or leave it. I usually advise a candidate to accept an offer if it’s within a few bucks of what they want. Don’t negotiate for its own sake or “because they expect you to.” But if you really think you’re worth more, never fold when the other guy gives you an ultimatum. This surprising research offers a sanguine strategy to get what you want. What I love about this method is that no salary survey data is required to make your case, and “integrative negotiations” can be a win-win.
Do you fold when the employer tells you the job offer is not negotiable? Or do you engage anyway? How do you go about it? What works for you? Did you ever blow it by going too far? Do you agree that “integrative negotiations” are possible when negotiating a job offer?
: :
I don’t know. If they don’t want to negotiate and you push at all (even on other side perks) they might just pull the whole offer. Seems like a big risk.
You should always use your own best judgment. But consider: If their reaction to your suggestion that they should negotiate is to pull the offer rather than let you decide yes or no at that point, what do you think life is going to be like working there?
There’s nothing wrong with them saying no, the offer is our best one, now please decide whether you want to accept it. I think there’s a lot wrong with a company that decides it wants to hire you, makes a commitment, then walks away because you suggested discussing the deal.
Again — it’s up to you. Just be prepared for the consequences of accepting the job. That’s the other risk.
“Integrative negotiations” are really the only type of negotiations for a job. It’s not like the employer has, say, $50,000/yr and by offering you $40,000/yr, they get to “keep” $10,000/yr in profit. Under that logic, companies might as well hire no one, magically collect revenue, and get 100% profit. (Shhhh…..some companies might actually think that’s possible.)
Both the employer and the employee benefit more from a mutually acceptable offer: increased profit for the former, and a paycheck/benefits/opportunity for the latter.
This is why employers who only consider cost are not good places to work; they can’t see opportunities. They operate under the “distributive” model mentioned in the article.
As for the “take it or leave it”, I think it depends on where you are in the negotiations. First or second go around, take that as a red flag. I think by the 3rd or later rounds, if an employer is making a final offer, they’re probably tired of negotiating.
Still, the professional way to say that is not, “Take it or leave it.” It’s “this is our final, best offer.”
Side note: I once interviewed for a job where the recruiter said the employer was going to pay $X and, I quote, “not a dime more.” Ok, I thought, we’ll see how much of that is bluster. Well, in the middle of multiple interviews with them, another opportunity came up. I knew this other opportunity would be more flexible, so I pretty much dropped the “not a dime” people. They later asked through the recruiter why I went somewhere else because they were so interested in me. Some people just don’t get it.
@Chris: Exactly. I’m not suggesting most companies understand the integrative model; they don’t understand investing in employees, either. We know this for a fact because there’s adequate research on the subject. Wharton’s Peter Cappelli has found that company spending on employee training and development has tanked in the past decade. So, why would these companies be doing investment-grade hiring and making investment-grade job offers?
Some companies just don’t get it. Note to everyone: Don’t be a job seeker that just doesn’t get it. Learn how to negotiate an offer by showing how much additional profit you will bring to the bottom line. Don’t worry about getting the numbers exactly right, because you can’t. Focus on developing a sound, defensible estimate that you can discuss candidly with the employer.
In my line of work (medicine), I think the biggest thing new doctors need to negotiate is the noncompete. They are extremely common in medical employment contracts. I’ve had them forced on me in states where noncompetes are null and void by statute. Not court precedent, but statute, tested in the courts. The noncompetes ofen exclude the docs from an entire metro area.
The employers say they need to protect themselves. Who needs protection, multi-billion-dollar hospital giant, or a new doctor with a quarter-million-dollar educational debt?
Doesn’t affect me, as I am solo. I’ve have to sign a noncompete against myself.
Generally speaking, how to negotiate, assuming I were just coming out of training today? I always tell medical students not to sign these, but they are invariably told “take it or leave it”.
I’ve wondered if there is any value to getting the “take it or leave it” in writing. Meaning, if one chooses to fight it in the future, would there be any value in establishing that the new doc had no choice in the matter, no ability to negotiate the noncompete?