Is Everything in China Negotiable?

Jun 27 • Morry Morgan Articles, Sales and Negotiations, Trainer Articles • 3348 Views • No Comments on Is Everything in China Negotiable?

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ARE YOU AN ‘ASKER’ OR A ‘GUESSER’? Your answer will determine whether you agree, that everything in China is negotiable; or disagree, which means it is not. This terminology was coined by writer Andrea Donderi, who defined both categories as such: “…In some families, you grow up with the expectation that it’s okay to ask for anything at all, but you gotta (sic) realise you might get no for an answer. This is Ask Culture. In Guess Culture, you avoid putting a request into words unless you’re pretty sure the answer will be yes. Guess Culture depends on a tight net of shared expectations. A key skill is putting out delicate feelers. If you do this with enough subtlety, you won’t even have to make the request directly; you’ll get an offer.” So which category do you most likely fall into? Still not sure? Take this situation for example. If you state to a friend that you are coming to their city and ask for advice on where to stay, then that leaves your friend with one of two options: Offering suggestions, or inviting you to stay with them. This ambiguous question regarding accommodation makes you a ‘Guesser’, because an ‘Asker’ would have just asked to stay over. No grey; just black and white.

Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you”, says Matthew in 7:7 of the Bible

Of course, some people switch between the two cultures, which is a healthy habit, but only when done consciously. So now you’ve deduced that ‘Askers’ are generally not afraid to broach subjects that may make others feel uncomfortable. Some people may see ‘Askers’ as pushy, tactless or just plain rude. Others, however, may see them as holy. “Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you”, says Matthew in 7:7 of the Bible. Either way, ‘Askers’ are more likely to ‘ask’ for discounts, request bonuses, or demand better payment terms. They are born negotiators. But does that necessarily mean that they can negotiate ‘everything’? ‘Everything’ is, in all practicality, an infinite sum and therefore impossible to prove. So let’s start with something more finite – the challenges of HR. What is there to negotiate? HR departments can be responsible for negotiating a wide range of products and services, ranging from candidate salaries and salary adjustments, internal disputes, through to vendor and supplier purchases. We’ll simplify the roles into three core business processes:

1. Selling ideas
2. Helping others reach agreement
3. Buying services

Let’s take a look at each.

 

1. Selling Ideas

The employment market in China is like no other in the world. A severe shortage of talent for an economy that is booming, in the face of the Global Financial Crisis, means that HR professionals need to ‘attract’ talent to compensate for overseas head quarters that are under-performing. An Aon Hewitt report found that 15 percent of all offers in China fail, meaning that over one in seven candidates will not ‘buy’ into the idea of joining your firm. Aside from constantly raising salaries above the industry standard, what solutions are available that are either free or inexpensive to attract talent? Answer: ‘Employer Branding’ and ‘The Interview’.

Employer Branding: While senior directors might ‘define’ the culture, it’s HR who should be responsible for ‘promoting’ that culture within an organisation. A positive employer brand helps sell the firm, but to do this you’ll need to engage Key Opinion Leaders (KOLs), most likely department heads, who can help drive the positive behaviours and eradicate those that are negative. An army of KOLs within an organisation can help make positive change smoother and ultimately successful. And since a strong employer brand can provide “access to 20% more of the potential talent market than weak or unmanaged employer brands”, according to the Corporate Leadership Council (2006), you will be able to ‘sell’ your firm to more qualified talents.

The Interview: In issue 34 of NetworkHR ‘10 Ways to Reduce Your Recruitment Costs‘ I highlighted how the potential line manager can damage all your hard work in the selling process. The cause? Ego. “So why do you want to join our company?” blurts the line manager to the candidate. A look of confusion spreads across the candidate’s face. The candidate turns to you and says, “But you invited me here!” Such a situation will only occur, however, if you haven’t prepared the line manager to ‘sell’ the position and the company. So remind the line manager of the competitive labour market and get them to drop their ego.

But the biggest commitment was from the employees, who first agreed to work on rostered days off, and then took single, rather than double time on weekends.

Recruitment is not the only area where ‘selling’ an idea is valuable. This skill is invaluable for negotiating salaries – down. While this scenario is unlikely to occur in China today, we should always be prepared for the next SARS or Global Financial Crisis that might pose a threat to job security. Case in point: in the mid 1990s Australian fruit packing company SPC was in dire straits. Founded in 1917, it was facing its toughest period, over half a century later with debts of over 120 million AUD (785 milllion CNY). The directors first committed to working for free for the first two years, and then met with employees each week to keep them updated. But the biggest commitment was from the employees, who first agreed to work on rostered days off, and then took single, rather than double time on weekends. Employees were even willing to take pay cuts to ensure nobody was retrenched. The company was saved and returned to profit, but only due to the ability of senior directors to ‘sell’ their idea.

 

2. Helping others reach agreement

The word ‘harmony’ (和谐) is ubiquitous in Chinese culture. It is promoted by government bureaus, billboards, and bullet trains. But this focus on the status quo often results in an inability to deal constructively with disputes, because ignoring the problem doesn’t always make it go away. Instead, conflict in the workplace needs to be managed, and this involves negotiation skills. Distilling ‘needs’ from ‘wants’ requires an ability to ask questions in a structured, but empathetic manner. This is referred to as ‘funnelling’: Start with an open, non-leading question; move quickly to a series of open, leading questions; and then finish with a closed, leading question. Here’s a very simple example:

“So I understand that you are disappointed with your recent salary review. Tell me your concern.” (Open, non-leading).
“I didn’t think that the pay rise recognised the contribution that I have made to the company this year.” (Need is ‘recognition’)
“When you say ‘recognised’, what do you mean?” (Open, leading question)
“I mean, that I was always doing overtime, working weekends and contributing more in meetings. I deserve a pay rise.”
“Ah, I see. And aside from this ‘hard work’, how did you fare in terms of your KPIs?” (Another open, leading question)
“Well, sure. I didn’t hit my KPIs.” “And why do you think you were unable to hit your KPIs?” (Another open, leading question)
“Umm…I guess because I didn’t know enough about our products.”
“Ok. So if I was able to arrange additional product knowledge training to help you reach this year’s KPIs would you be interested in attending?” (Closed, leading questions focusing on ‘need’ of recognition)
“Oh, absolutely. That would be great!”
“Ok. Let’s meet midyear to see how you are faring. I am sure you will be able to hit your end of year KPIs and then we can reward you appropriately. Agree?”
“Sure. I’ll accept that.”

 

3. Buying services

In my book, ‘Selling Big to China – Negotiating Principles for the World’s Largest Market’ I highlight that procurement departments are bound by the same rules that apply to sales professionals. Those rules are simplified by the equation, which is: Needs + Features = Benefits Goodwill + Reputation = Trust Benefits + Trust = Agreement Human Resource departments either are, or work with, procurement departments. This is where the proverb, “A penny saved is a penny earned” is not only true, but is also be an understatement, since a penny ‘saved’ is tax free, whereas a penny ‘earned’ is liable to at least 5% sales tax. So in reality a penny saved is worth more than a penny earned. Semantics aside, HR professionals also know that a strong relationship with vendors and suppliers leads to faster delivery, higher quality and flexibility. The ‘customer is a partner’ will always trump the attitude that the ‘customer is God’ because it will result in a win-win situation. So is everything in China negotiable? That’s certainly difficult to prove true or otherwise. What is evident is that an HR professional with negotiation skills is a greater asset to their company. Now it’s up to you to ‘Ask’ for negotiation skills training.

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