If you don’t ask, you don’t get. It’s this simple ethos that incentivises enterprising leaders to barter down their stakeholders and achieve savings for the good of the business. We all have to step into the role of the negotiator at various points in our working lives, and if you’re a key decision-maker, the negotiations that befall you are often indispensable for the success of the business.
But which are the business domains where it’s most important to negotiate?
Here are three of the areas in business where it pays to be persuasive — some that you might have thought of already, and some that you almost certainly won’t have.
We’ll start with the latter. After all, it’s pertinent in our increasingly digital age to discuss the importance of saving on IT costs. Throughout the 2020s, businesses have been contending with growing pressures on their IT providence thanks to accelerating digital transformation efforts and IT skills suffering from a global shortage. But where can you claw back some savings?
It’s in your software. Nowadays, businesses deploy as many as 130 different applications to fulfil daily tasks, according to Statista. If your IT costs are on the up, it makes sense to try and negotiate down your contract providers. This is especially important to do as software prices continue to rise. According to software management platform Vertice, “current software inflation is vastly outpacing the going market rate, meaning that companies are spending more for the same products with each new year that they subscribe.”
The SaaS specialists continue that “negotiating your recurring contract terms can help to minimise your regular outgoings and protect against future price uplifts,” helping to mitigate the steep incline in costs that you might be experiencing.
Employee compensation and benefits
People are the lifeblood of your organisation. To attract and retain top-tier talent, then, you’ll need to become adept at negotiating employee remuneration and any other benefits you offer. In fact, as many as 46% of workers say that salary or bonus is the greatest motivator for staying at their current company, while a MetLife report claims that employees who are satisfied with their wellness and benefits programmes are 1.6x more likely to be retained.
So, how do you balance the importance of compensation with the need to profit?
Effective negotiation empowers employers to customise their packages to align with the needs and preferences of each employee. This tailoring not only enhances job satisfaction, but as demonstrated by the above statistics, can cultivate unwavering employee loyalty. FasterCapital offers a full guide on how to balance labour costs and employee benefits, which involves “analysing benefit utilisation rates, negotiating favourable contracts with benefit providers, [and] exploring alternative benefit options such as telemedicine services or wellness incentives”.
Office real estate
Thinking about leaving remote working behind? In the post-COVID economy, many organisations are trading in their work-from-home schedules for the productivity and camaraderie of the office. A global workplace report by Unispace reports that 72% of companies have implemented a return to the office in the time since lockdowns forced staff out of their city HQs and into makeshift home offices.
However, with this revival has come a rush to secure the limited office premises found in accessible business districts, where vacancies are growing scarce. This has driven up the costs of leases and rental agreements — making negotiations all the more necessary to reduce expenses and maintain the operational health of your business.
After all, the boost in productivity you could see from a return to the office means very little if accompanied by mammoth rental costs. Negotiating favourable office real estate pricing means the difference between thriving in a prime business hub and struggling with your outlay. The Workplace Company advises office managers to negotiate for a rent-free period, break clause, and leverage comparable property prices in the area when negotiating.