Modern Middle Manager
Primarily my musings on the practical application of technology and management principles at a financial services company.
Wheeling and Dealing

Tuesday, July 05, 2005  

I am not always the best negotiator. Case in point: I've tried to pry away a contract employee from his employer the proper way, coming to mutually agreeable terms that nullify their contract's existing do-not-solicit clause. After four weeks of negotiating, the way I found to break this impasse was to finally offer a ridiculously low sum of money and bring in our COO to play the Last Word.

First Round (3 weeks ago)
Us: We want the contractor and are willing to do a deal. What do you have for us?
Them: Contract-to-hire lasting 6 months and a 15% buyout at the end. I have to maintain my top & bottom line, you know.
Us: Ouch. We'll think about it.

Second Round (2 weeks ago)
Us: We still want the contractor. Can we link other business we drum up to replace the loss of our business?
Them: No.
Us: OK, what about 3 months at rate X with a 10% buyout.
Them: Too low. I have to maintain my 20% margins, you see.
Us: I'll see what I can do.

Third Round (1 week ago)
Us (via e-mail): I've given a lot of thought to this. We really aren't willing to pay that kind of premium. Final offer: we will give you rate Y for 100 hours of the contractor's time and rate Z for 100 hours of some programmer time. Then you lift the non-solicit. That's it.

Fourth Round (today)
Them: You insult us by offering a ridiculously low amount. I have margins. What happened to 3 to 6 months?
Me: We can't afford anything more. With the amount you're asking, we can get an outside project manager.
COO: Look, we want to be reasonable. What will it take?
Them: 15% buyout.
COO: That's steep. What we offered (the 200 hours at rates Y and Z) was a premium of A. You want a premium of B. Can't we meet in the middle?
Them: We only offer our best clients a buyout rate of 10%.
COO: Then we'll pay for 200 hours of support at rates Y' and Z' to make it 10%.
Them: Deal.

Yes, we probably didn't get the best deal. On the other hand, at least my initial attempts weren't so far from where we settled. And the ham-handed negotiating at the end seemed to get them to move.

posted by Henry Jenkins | 7/05/2005 08:43:00 PM

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