Tips for negotiating a pay rise

Posted on 23/9/2021

HR & Recruitment

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An important element of job satisfaction is being paid what you’re worth – but when it comes to negotiating a pay rise, people are often overwhelmed by fear or self-doubt. In our experience, the biggest mistake professionals make is not proving how their value surpasses their current pay packet. Here are some tips on how you can negotiate your next pay rise.

At Perks People Solutions we believe that an employee should be paid a fair day’s wage for a fair day’s work. To better understand what a what a ‘fair’ wage represents, we recommend conducting some initial research and sourcing relevant data to assist you in building a case for a possible salary increase.

1. Do your research

Your first step in determining where your pay sits involves finding your award rate and comparing your role to similar ones in the marketplace. Be mindful that ‘Googling’ salaries can provide inaccurate data as not all rates are the same and can vary significantly based on circumstances such as location. For example, a similar job in Sydney pays more compared to the local Adelaide market as it takes into account a higher cost of living.

A better approach is to review industry specific resources such as the Australian Government’s ‘Fair Work’ website to find out more about which award applies to your current employment situation. If you’re currently paid at award rate or above, it may be difficult to justify an increase to management or HR especially in the context of the current global pandemic.

It is also important to understand the associated costs an employer pays to employ you. They don’t just need to cover your salary and super, but also the added costs of payroll tax, levy’s, insurance, rent, utilities, equipment and other essential operating expenses.

For example, a sales consultant on a $100,000 package that brings $200,000 worth of sales each year may feel a pay rise is justified by the gap in salary and associated sales, however, they don’t factor in the expenses which greatly diminish this gap from the employer’s perspective.

2. Know your market worth

If you’re set on seeking a pay rise, be sure your justification is backed up with facts, not opinions and able to demonstrate the value you have added beyond role expectations.

If you have delivered significantly over and above your role expectations, and can clearly demonstrate this in a quantitative value, then you may be in a strong position to request a pay rise. However, be mindful if your current package already includes a bonus structure, a pay rise may be harder to achieve.

3. Present your case

If you have conducted your research, know your numbers and can back up your request with unbiased fact, then it is time to prepare yourself for a conversation with your manager.

The ideal approach is to coordinate a face-to-face meeting with your manager to discuss your job performance and seek feedback on areas for improvement. If the outcome of this initial discussion is positive, then it may be an appropriate time to raise the possibility of a salary review and work through the steps that would be involved to achieve this.

Most organisations will have an existing remuneration policy which details the process for salary reviews and increases, so make sure you are across these policies and timelines. These reviews will often occur on an annual basis and in preparation for a new financial year, or as per your employee bargaining agreement (EBA).

In summary, only after your extensive research and understanding of the fair market remuneration rate should you consider approaching your manager for a pay rise. Ensure you remain respectful, can highlight areas of your job performance where you have excelled and understand the costs associated with your employment from your manager’s perspective. Also be prepared to accept that your request for a pay rise may not be successful in the first instance, so remain proactive and continue to have open discussions with your manager about how you might be able to achieve it in the future.

If your request proves unsuccessful and it seems unlikely that you will be able to secure a pay rise in the future, then it may be time to consider alternative employment and seek out your next opportunity.

Looking for your next career move? Visit Perks People Solutions to find a list of current opportunities.

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Speak to one of our HR & Recruitment Team Members.

Cecilia White

Cecilia White

With a background in legal practice, Cecilia has developed strong technical expertise in all matters relating to workplace law, including awards, contracts, disciplinary matters, investigations, equal opportunity and HR policy development.

Collette Ordish

Collette Ordish

Collette brings over 20 years of professional experience in business and human resources across Australia, with over 10 years served in strategic HR leadership positions.

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