Negotiation skills are imperative for companies of all sizes and industries to succeed in the modern global market. Virtually every business interaction requires some degree of negotiation, both internally within the company and externally with other companies, vendors, and prospective customers. In addition, skillful negotiators make incredibly valuable assets to companies by improving financial performance and encouraging positive, long-term relationships. Effective negotiation involves understanding practical tactics for productive communication, analyzing the specifics of the other party to determine their needs and goals, and implementing these tactics strategically to convince the other party that you are uniquely positioned to meet their needs and help them accomplish their goals.
Why Is Training Necessary for Business Success?
Negotiation training, and all employment training in general, is supported by the human capital theory. Human capital refers to the intangible economic value of a worker’s knowledge, skills, and experience. This theory posits that all companies have an incentive to pursue human capital in new employees and increase the human capital of existing employees. According to this theory, a worker’s productive capacity is not set in stone but can be significantly improved through education and skills training. Whether they are aware of the theory behind their actions or not, American companies understand the importance of training their employees to deliver the best results to their clients and make significant investments toward this goal. They spend an average of $40 to $60 billion every year on training resources.
Why Is Negotiation Training Important?
While training for specific tasks and technologies is helpful, companies are increasingly recognizing how vital negotiation skills are to the success of their company. As a result, many of them have decided to invest a large portion of their training budget in negotiation training programs for their teams. Negotiation training allows workers to become more productive negotiators by teaching them critical strategies for negotiation and giving them the chance to practice these strategies in real-world scenarios. In addition, workers learn how to recognize behavioral biases and irrationalities and respond to them appropriately, helping them maximize their advantage and secure a positive outcome in negotiations throughout various business environments.
What Effect Does Negotiation Training Really Have?
Before investing in negotiation training, business owners and managers want to ensure that they receive the highest possible return on investment. Researchers from Suez Canal University in Egypt reviewed the results of negotiating training studies to determine the effectiveness of the training. They published their findings in 2009 in the Journal of European Industrial Training. They conducted six meta-analyses of data from 57 lab experiments and 36 studies completed between 1985 and 2004 and divided them into two meta-analytic studies. The objective of the first study was to determine the effect of training level on the individual and joint performance of negotiators, and the objective of the second study was to compare the effects of different levels of training on performance.
In their meta-analyses, researchers found that negotiation training does effectively transfer negotiation skills to trainees. It directly improves the negotiation performance of trainees in both individual and joint situations by allowing them to gain valuable skills and teaching them how to apply these skills to handle novel and stressful situations. The training program’s success correlates with the amount of time workers spend in these programs, with trainees who spend three weeks or more in training showing more significant improvement than trainees who spent only one day training. However, even the shortest training programs improve performance, and programs of any length can be supplemented with follow-up training to help them maintain the skills they acquired in the original training program. Ultimately, the more workers practice conducting business negotiations, the more experience they gain, the more confident they become, and the better prepared they will be for negotiations in the future.
Prepare Your Team for Success
The only proven way to enhance your team’s negotiation skills is to provide training that is relevant, experiential, practical and reinforced. At a time when gaining a competitive edge is harder than ever, we strongly recommend investing in negotiation training.