How to negotiate a pay rise in Australia
Of all the awkward conversations you’ll need to have with your employer, the one where you negotiate a pay rise is 100% necessary, says She’s on the Money founder Victoria Devine.
A lot of people fear asking for a raise simply because they’re unprepared to make their case. Many make the mistake of thinking, “Oh, I’ve been at my job for 12 months, that must mean I’m due for a raise.” Imagine walking into your boss’s office and saying you want $5,000 a year more and when they ask why, all you have to say is, “Because I’ve showed up here every day for a year.” *Crickets.*
Well, that’s not how the conversation needs to go. And at a time of low unemployment and high inflation, there has arguably never been a better and more important time to ask for a pay rise, the right way.
In this adapted extract from Victoria Devine’s 2021 book, She’s on the Money: Take charge of your financial future, the multiple award-winning financial adviser gives tips on how to negotiate a pay rise.
When should you ask for a pay rise?
Unless a pay increase timeline is laid out in your contract to adjust for inflation, asking for a raise shouldn’t come down to how long you’ve worked somewhere. You’re also not entitled to a raise just because you feel like you’re working outside of work hours.
The nine-to-five culture has shifted, and as a result we often feel we should always be online, in the loop and essentially on the job. Before accepting a job, you need to have open and honest conversations about what will be expected of you in and outside of the office, and make sure you negotiate a salary that reflects this.
If you’re told that your job should only be done within working hours, it’s your manager’s job to make sure your workload fits within the designated time frame. If you’re working stupidly long hours outside of work, one of two things is happening.
- They’re giving you too much work.
- You’re fluffing around too much.
While I appreciate going above and beyond, I don’t equate that to working out of your specified hours. It’s about the value you’re adding during work hours. Trying to show your boss that you deserve a pay rise because of the time you put in is not enough. Ultimately, it’s not about your hours, it’s about your value.
Do you deserve a pay rise? Determining your worth at work
Determining if you deserve a raise comes down to knowing your value and how your time and actions are contributing to the success of the business. Here are some questions to ask to determine your worth:
- What are other people in similar roles in Australia earning? You can use websites like PayScale or visit the Australian Government’s Fair Work website to determine your industry’s award wages.
- How have you directly impacted the profitability of your organisation? Can you list three examples?
- Are you meeting KPIs (key performance indicators)?
How can I ask for a pay rise?
Here are some tips when crafting your pay rise conversation:
- Don’t use examples like, ‘My goal was to earn $100,000 this year so I’d like a raise.’ Use language like, ‘I believe that I deserve a pay rise because I’ve done x, y and z and that directly impacted a, b and c.’
- Show the ways that you’ve been instrumental in the financial success of the company and team culture.
- Make sure all of your facts are indisputable.
- It takes confidence to articulate your worth, so strike those power yoga poses before walking in!
What can I negotiate at work aside from my salary?
When you’re considering a job, you need to do your research, because some industries have enterprise bargaining agreements (EBAs) with unions that govern the minimum and maximum pay rates for employees. Let’s say you’ve climbed your way to the top and there’s literally nowhere else for you to go, salary wise. You can still negotiate outside of salary.
Try asking for things like:
- more flexible hours
- leave entitlements
- work from home hours
- a company car
Being compensated adequately for your work is crucial for a whole lot of reasons. For starters, your mental health may suffer if you don’t feel like you’re being compensated fairly. You can become resentful and frustrated. The quality of your work may also decline because you start taking on lots of projects, or mentally just check out. Plus, your ability to achieve and maintain financial independence depends on it!
What happens if your boss says no?
Let’s say you wanted a $15,000 pay rise, but your boss only agrees to $5000 – challenge it. Say something like, ‘It’s not in line with my expectations’ and then explain why you’re worth more. If they still say no, ask if they will consider reviewing your request in another three months.
Ask what you need to do in order to have your request reviewed again. Are there any KPIs for them to keep an eye on?
Remember that your boss saying no to a pay rise request does not mean that you will never get one. It’s simply a no this time around. However, if they do explicitly indicate that a pay rise is not possible, you will need to consider your options. I know that rejection sucks and you might feel deflated, but you should still be proud that you took that step. Learning how to negotiate is a skill, and one that will make you even more valuable.
The other thing you should do is go home and think. I want you to determine if staying in your job is going to allow you to reach your financial goals. If it’s not, use your lunch break to start exploring other job options. But before you apply – be sure you know your worth from the start.
This is an edited extract from She’s on the Money by Victoria Devine (published by Penguin Random House Australia). This extract was first published by Canstar in June 2021.
Main image source: Atlas Illustrations/Shutterstock.com
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This article was reviewed by our Deputy Editor Sean Callery and Sub Editor Tom Letts before it was updated, as part of our fact-checking process.