Q: What do a doormat and a bull-in-a-china-shop have in common? 

A: Neither are good approaches to negotiation. 

In a previous post I briefly discussed contract negotiations. Because this is something that can greatly influence one’s career, I feel it’s worth taking a closer look at what it takes to be a successful negotiator. If you’re already a pro at this, you might want to read on anyway so as not to miss my personal story (Ebert and Roeper give it two thumbs up!).

But first, what does “negotiate” mean?

Negotiate: to confer with another so as to arrive at the settlement of some matter.

In practical terms, the reason to negotiate is to produce something better than the results you can obtain without negotiating, or in other words, to “change the outcome for the better.”  

Notice I didn’t say “changing the outcome for myself.”  There are always at least two sides in a negotiation and a “good” outcome is one that is good for all parties.  Also, the “outcome” can be a lot more complicated than you might think.  

The reason for this? Every action has consequences; changing one variable in a transaction influences other variables.  If you successfully negotiate a salary raise, the outcome isn’t just a change in your salary.  It also changes the group’s expense line and it may create inequity among employees.  Note: Be careful what you negotiate.  

We all negotiate

Like it or not, you are a negotiator.  As a toddler, you negotiated with friends about sharing toys (you were a sharer, weren’t you?).  

As an adult, you might negotiate with: neighbors (when a tree falls down on both properties); siblings (taking care of your parents); children (minutes of TV time or 3 more bites of broccoli and then dessert); spouses (picking out new furniture—wait, can we buy a sports car, instead?); roommates (it’s your turn to take out the trash); colleagues (who will pick up the extra weekend of call?); potential employers (getting the job); and bosses (you’ve earned a raise).  

When was the last time you negotiated something?  Was it when you made an offer on a house, followed by a few counter offers?  Or haggled over a find at a flea market?

Have you ever passed on an opportunity to negotiate?  Did you pay the sticker price for a car instead of offering less?  

Did you sign the first job contract offered without questioning any of the terms (uh-oh)?  

Have you paid a financial advisor an assets under management fee for 10 years without ever negotiating for a better rate (guilty, as charged)?  

When was the last time you spoke with your insurance agent to negotiate the terms of home or auto insurance (or do you always pay the amount on the invoice that arrives in the mailbox every year)?  

Negotiation is an opportunity to optimize a situation to be more in your favor. But…

When to negotiate (and when not)

It isn’t necessary or practical to negotiate every transaction in life.  Case in point: you don’t need to worry about paying 29 cents for a banana (which, by the way, must be the cheapest food on the planet).   

Negotiating becomes more important as the stakes increase.  Your starting salary will serve as a baseline on which future raises are based.  That’s pretty high stakes. If everyone in a group receives a pay raise of 5%, your salary of $250,000 will increase to $262,500.  A salary of $300,00 would increase to $315,000.  The difference between the two salaries, after the first increase, grew from $50,000 to $52,500. Your initial salary level should be fair and reflective of what you’re worth and what the market can bear.  

It’s also not necessary, or even wise, to negotiate every element of a transaction.  Why?  Because “over-negotiating” sends a negative message to the other party that you’re not dealing in good faith for an outcome that is reasonable and fair.  In the case of contract negotiation, it is an indication to the employer of what kind of an employee you will be.  Who wants to hire someone who will constantly be asking for more?  

The most significant outcome from negotiation is often the relationship that develops between the parties involved.  Negotiation is seldom a one-time deal.  There will likely be opportunities for future negotiation.  In fact, you should hope for that.  How you negotiate today will open or close doors for the future.  Don’t make the mistake of trading a big win today for a large loss in the future.  That’s why a “win-lose” outcome is seldom the best outcome. 

You were never taught how to negotiate?  You can learn!

Undergraduate and medical students don’t negotiate their medical school tuition.  Residents and fellows don’t negotiate their salary or benefits.  As a trainee, I bet you were never taught the art of negotiation.  At this point, you might be asking, “how do I learn how to be an effective negotiator?”  There are lots of books on the subject, mostly iterations of the same general principles.  

Here’s a book I recommend: “Getting to Yes: Negotiating Agreement Without Giving In” by Fisher, Ury and Patton (Roger Fisher is the Samuel Williston Professor of Law Emeritus and Director Emeritus of the Harvard Negotiation Project.) It’s short enough and interesting enough that you can read it cover to cover and it includes actionable strategies that you can apply in your professional as well as your day-to-day life. 

Principled negotiation (from “Getting to Yes”) involves four points:

  • Separating the people from the problem (attack the problem, not each other)
  • Focusing on interests, not positions (avoid having a bottom line)
  • Inventing multiple options looking for mutual gain
  • Insisting that the result be based on an objective standard (e.g., market value, expert opinion, custom, law) 

The first point seems self-explanatory – keep emotions in check. Focus on the tangibles. One sure way to derail a negotiation is to let your emotions speak for you.  Decisions based on anger, fear, hostility, or trying to preserve your ego are likely to end in disaster.  It takes practice and skill to overcome the urge to fight, especially if something personal is at stake.

The second and third points are related.  Consider salary, for example.  Salary isn’t always the element of most interest in contract negotiation but it is one of the most common.  It should be.  If radiologists weren’t paid for their work, most would not do it.  Money pays for the things we need to exist and unless we already have a life’s-worth, we need to acquire it by some means.  Unless you have a steady stream of income from real estate investing, a trust fund, an annuity, or some other source, you will need to earn it.

For example, setting a position of a certain salary level (your $ bottom line) will lock you into a number that will give you less room to negotiate.  Using principled negotiation, you don’t want to narrow the gap (between your salary position and that of the employer), but rather to widen the options.  You’re not looking for one right solution.  Being open to a number of different solutions will give you more room to negotiate.

A radiology group or department often has a fixed pot of money budgeted for radiologist salaries.  In that case, you might be wondering, how can there be multiple options?  The most common solution is to sweeten the salary pot with a sign-on bonus, loan-repayment benefit, greater academic time, or other perks.  There are yet other ways to widen the options.  Consider that the department may not be the only source of revenue.  Depending on the type of radiology job under consideration, there may also be a hospital, university, or corporation that will want a stake in your hire.  

Radiology groups have shared goals with the institutions with which they associate. For example, they may share a common plan to increase diversity among their workforce.  Perhaps there are funds associated with this initiative that can be used to hire an underrepresented minority radiologist.  

Hospitals have a stake in bringing on radiologists who can develop a new service line (and it’s associated $$$).

As another example, money might be available from a funded quality improvement initiative.  The hospital might pay a portion of the salary of a radiologist who is willing to be a leader in that initiative.  Hospitals have a stake in bringing on radiologists who can develop a new service line (and it’s associated $$$). Do you have the skills needed to start a uterine artery embolization service, or a prostate MRI program?  Such examples are win-win situations for all the parties that can jointly contribute to your salary.  

Universities are another source of salary income.  They contribute money to departments to pay for the teaching time of radiologists and radiology medical student course directors.  Some of this can be passed on to you as part of your guaranteed salary.

Fourth point – arm yourself with objective standards

It doesn’t get more objective than a dollar number. Salary ranges are easy to get. 

Note: A better interest to consider is compensation, which includes benefits and salary.  Considering this broader term opens the door to more options, which is the third point of principled negotiation.  But total compensation numbers are harder to get.

Let’s say you’ve researched all the latest salary surveys and talked to other radiologists in a similar position (based on skill, experience, location, and type of practice) so you have an idea of what is fair and reasonable.  It’s good to go into a negotiation with an acceptable range and not one number.  And it’s good to know your BATNA (Best Alternative to a Negotiated Agreement) before negotiation starts.  BATNA refers to the lowest value of a deal that you’re willing to accept, and at anything less, you will walk away from the table.

Note of caution:  a rigid BATNA inhibits imagination.  It reduces the incentive to invent a tailor-made solution that can reconcile differences in a more advantageous way for both parties.  It limits your ability to benefit from what you learn during the negotiation process.

You’ll be in a much better position to negotiate if you’re considering your total interests and not one position and you can create multiple options to get to your desired BATNA.

Let’s assume you’ve concluded, based on the research you’ve conducted, that an acceptable salary range for a first radiology job, for someone in your position, is $250,000 – $350,000.  Does that mean your BATNA should be $250,000?  Not necessarily, if you weigh the benefits such as retirement contributions, insurance, and paid time off.  Consider the following two one-year probationary job offers:

Job A offers you $300,000 in guaranteed salary, a compensation package worth $40,000, and 30 days of paid time off.

Job B offers you $240,000 in guaranteed salary, a compensation package worth $90,000, and 35 days of paid time off.

You might think the two offers are fairly similar in worth, and that a salary of $240,000, although lower than market value, might be okay. But you don’t have all the information you need to make that conclusion.  Will salary be guaranteed every year or just the first year?  If only for the first year, how is it determined going forward?  Is it based on work relative value units (wRVUs) or some other measure of productivity?  Does the group typically distribute a bonus at the end of the year?  If so, what portion would you be entitled to?  When should you expect a salary increase?  What are the criteria for an increase?  Who determines salary increases?  What type of retirement package are you being offered?  Are you able to invest in diversified, low-cost index funds?  Or will you have to choose from a limited number of funds with high fees?

There’s another reason to think beyond the first year.  Job A may come with regular increases in salary and Job B’s history of salary increases might be spotty.  There’s nothing wrong with asking your potential employer how much you could be expecting to earn in 2 years and in 5 years.  You might even be able to negotiate future salary increases as part of the initial contract.  

If the first year’s salary offer is below $250,000, and the benefits don’t compensate for it, but otherwise the job is more appealing than other offers, you can ask for a sign-on bonus or negotiate a raise the following year.  You’ll be in a much better position to negotiate if you’re considering your total interests and not one position and you can create multiple options to get to your desired BATNA.

My personal story

I’ve had lots of experience on both sides of the negotiating table, both as a hirer and a hiree. Most recently, I negotiated the current position I have as Director of Medical Content at MRI Online.  It’s a non-clinical role that allows me the opportunity to use my leadership and educational skills to help build the best educational platform for radiologists.  Since it’s a unique position, there aren’t published salary ranges.  But I knew the value of my worth as a clinical radiologist and an administrator so that was a place to start.

My interest was total compensation, not salary.  I considered the total value of salary and benefits as an employee and an independent contractor.  As an employee, I would be eligible for the usual benefits such as office space, retirement, insurance, and vacation.  But as I was already retired from clinical work and financially independent, I didn’t need disability, malpractice, or life insurance.  And I had a good health insurance plan through the Wisconsin Retirement System.  

So, what did I decide to do? I opted to work as an independent contractor, waiving all benefits (except for paid time off).  Since they would save money on benefits, the company could afford to pay me a higher salary as an independent contractor than they could as an employee.   

Note: The Internal Revenue Service (IRS) considers a self-employed individual (i.e. independent contractor) to be both an employer and an employee.  As such, I am required to pay the full 12.4% Social Security tax up to the wage limit and Medicare tax of 2.9%, for a total self-employment tax of 15.3%.  If you choose self-employment over being an employee, the salary should be increased accordingly (in some cases up to 50% more).

Also note: As an independent contractor (i.e., sole proprietor), I am able to deduct 20% of my qualified business income (QBI) as a 199A deduction on my income taxes.  The QBI deduction is not considered an “above the line” deduction because it is subtracted after adjusted gross income is calculated.  But it is also not an itemized deduction, so I’m able to claim it as well as the standard deduction.  As a sole proprietor, I can also deduct health insurance costs as an “above the line deduction”, decreasing my taxable income dollar for dollar. And since I work from home, I am able to deduct home business expenses.

And finally: Federal anti-discrimination laws only apply to “employees” and not independent contractors.  Your job as an independent contractor may not be as stable as it would be as an employee.

Never yield to pressure, only to principle  

What do I mean by that?  If an employer tells you that they can only offer you a starting salary of $225,000, and you know that number to be well below average, you don’t have to give in.  What can you do?  You can share your salary data with the employer and ask her to explain why her offer is fair market value.  This creates a situation where you are asking for a fair salary based on objective criteria.  Note:  be prepared for the employer to come back with her own objective criteria, different from yours.

Get in touch with your assets

Factors that will influence bargaining power include who needs who more, external market forces, and what types of contracts other people are signing.  Knowing your assets gives you more negotiating power.  What assets might a newly-graduated radiologist bring to the table?

  • Manpower (especially valuable during times of manpower shortage)
  • Unique skills (CT colonography, prostate MR, etc. if you concentrated on these areas in training)
  • Extra degree/certification (PhD, MBA, IT, MEd)
  • Underrepresented minority (a more diverse group is a better group)
  • Ties to the community
  • Research experience and interest
  • Fellowship training in a high demand area
  • Flexibility in work hours
  • Flexibility in scope of practice (i.e., willing to practice general radiology)
  • Ability to start the day after finishing training (if you’re willing to do so)

Something else that will give you power is knowing in advance what the BATNA for the other side is. Since this is difficult, if not impossible to obtain, you should strive to at least understand what the other side’s alternatives are.  Learn what the other party needs in a new hire by reading the job description and perusing the group’s website. 

Entering negotiations with information about the other side’s interests will allow you to better determine your own value by knowing what you can bring to the table.

Talk to former and current employees.  Ask targeted questions about the direction the department is taking, what is needed to get there, and how you might fill a needed role. Ask whether there are deficiencies in the group (and view these as opportunities).  

For example, unless you ask, you may not find out that none of the current faculty members have an interest in leading the medical student radiology course. This results in a missed opportunity to emphasize your educational leadership interests.  If you don’t check out the group’s website you might not discover how lacking it is in content and design and blow an opportunity to promote your experience in web development.  Entering negotiations with information about the other side’s interests will allow you to better determine your own value by knowing what you can bring to the table.  

Don’t ignore the soft skills

How you negotiate reveals a lot about what kind of a person you would be to work with.  You’d be smart to keep this in mind.  This works both ways – you will get to see what kind of person the employer would be to work with by the way she negotiates.  Negotiating is an opportunity to demonstrate your principles: fairness, continuous self-improvement, service-orientation, and a desire to see the group thrive.  If the employer values those qualities, she will want to add you to her team.  If you convince all the people you interview with and otherwise meet that you share the team’s values, those people will root for you.  

Negotiating presents an opportunity to build trust and sow the seeds of a long-lasting positive relationship.  It’s hard to put a dollar value on that.  How much is it worth to have a world-renowned radiology chair write a personal recommendation on your behalf?  Her initial impressions of you will be influenced by your style of negotiation.  

Go into negotiations with a clear idea of what is most important to you.  Then focus your asks on those interests.  Presenting a long list of demands will make you appear unreasonable and not the kind of person a group wants to bring onto their team. Most employers are not going to fight a limited number of changes that would make a candidate happy. After all, they spent a great deal of time and money to recruit you, and they won’t want to start the process all over again.

Don’t sell yourself short  

Even “standard” contracts that “every physician has signed” can be changed.  Underestimating your value can substantially reduce your compensation—and that reduction can last a lifetime if future raises are based on initial salary.  A person doesn’t get paid what they’re worth, they get paid what they negotiate. It’s very likely that the first offer you receive won’t be the best offer. You may recognize those words from previous posts because it’s a mantra worth repeating. View receiving a contract as an invitation to bargain. As a general rule, initial contracts are worded in the best interest of the employer and should never be signed outright.  

I also recommend against accepting an offer on the spot. The right amount of time (days, not weeks) provides an opportunity for both parties to think about what they bring to the table.  If you’ve made a good impression and “sold yourself”, a day or two will make you even more valuable in the eyes of the employer.  

My advice: when presented with an offer, thank the employer, express your interest in the job, ask for a day or two to think it over (and to discuss it with your legal consultant), and come back with a sound and reasonable counteroffer.

When the other side doesn’t play smart 

Since negotiation is a skill that is honed with education and experience, you shouldn’t be surprised if you find that the person you’re negotiating with isn’t very good at it.  This actually works to your disadvantage.  You would rather be negotiating with someone who understands the importance of creating multiple options and building relationships. When this isn’t the case, you’re going to have to work harder to make up for the other side’s deficiencies.

When the other side doesn’t play fair

So too is it difficult when you’re stuck negotiating with someone who doesn’t play by the rules.  Here are some of the ways interviewers don’t play fair:

  • They try to deceive you by representing themselves as someone with authority they don’t have (promising you something they can’t deliver) or by offering phony facts
  • They deliberately make you feel uneasy (the room is too hot or cold, they don’t offer food/water or a bathroom break)
  • They criticize your appearance or fail to listen to you or make eye contact
  • They ask illegal questions (do you plan to have children?)
  • They threaten or overly pressure you (I need to have an answer right now)

One way to handle the above is to stick to your principles of negotiation, which includes separating the people from the problem and focusing on your interests, multiple options and objective criteria.  

Another solution, which might be the best, is to walk away.  Do you really want to work with someone who demonstrates that kind of negative behavior?  Unless you only plan to stay with the group for a short period of time as a temporary position until your dream job opens up or until your family is free to move around, you should think twice about forging a long-term relationship with someone who creates a toxic work environment.

Closing remarks

Negotiation is much like politics (the definition of which is “the art of influencing others”). Becoming a skillful negotiator requires a bit of finesse as well as education and practice.  In high stakes situations, like your dream job, you might want to practice with a colleague, faculty member, or an experienced and trustworthy person in a hiring position.

The way you negotiate can mean the difference between making a deal or not, whether the pie is expanded or merely divided, and whether you have a good relationship with the other side or a strained one.  If you do come to an agreement, be happy about it, even if you didn’t get everything you wanted.  Both sides should be happy to be working together.  It won’t benefit you any to feel remorse. If that’s the case, it probably wasn’t a deal worth making.

Remember:

  1. Know what you want and what you can accept 
  2. Know what the other party wants and needs
  3. Negotiate in good faith and build a lasting relationship