Employers’ failure to teach staff good contract negotiation skills and ensure that standard negotiation procedures are in place is costing them millions, according to a new report.
The study among 124 Global 2000 organisations worldwide, undertaken by sales consultancy Huthwaite International, found that success today typically depended on an individual’s ability in the area rather than on effective, standardised negotiation procedures.
Some 80% of respondents indicated that they currently had no such internal negotiation processes in place, meaning that any concessions made during such an interaction tended to be arbitrary. To make matters worse, a further 84% failed to measure the success of any given negotiation after a deal was signed.
David Freedman, sales director at Huthwaite told Computer Business Review: "The best negotiation happens when both sides are skilled and when the individuals going into a room understand negotiation. With skills and processes on both sides, you’re more likely to get an outcome that can stick."
But it was a myth that good negotiators were born that way, he added, indicating that training could make a huge difference.
Although the net income of Global 2000 firms had fallen 30.9% over the last year, the report indicated that those with a high negotiation maturity benchmark score saw profits rise by an average of 42.5%.
While there was no direct correlation between negotiation skills and profitability per se, companies that had well-trained staff, took time to plan and had mature procedures in place tended to evidence better business performance, Freedman added.
