5 sure-fire ways to get a juicy pay rise in Australia
Are your palms sweaty? Is your heart racing? Maybe there’s a deep sense of foreboding in the pit of your stomach? You may be on the verge of a parachute jump or other life-endangering feat, but you could also be about to do something equally terrifying: ask for a pay rise.
Year-on-year wage growth was just 2.1 per cent in Australia over the March quarter 2018, which barely covers the 1.9 per cent inflation increase in the consumer price index over that time. Put simply, it’s important to take a proactive approach to your earnings if you want to stay ahead of rising household prices.
So, what are some pay rise tips for Australians? Well, there are no certainties in life, but these pointers should give you a great head start.
Ask for one
We know. You came here for the crème de la crème of insights on how to clinch a pay rise and you get told to just ask for one, but let us explain. Many Australians are simply too nervous to negotiate more money from their boss.
Nearly half (49 per cent) of respondents in a recent Indeed survey said they wouldn’t be asking for a pay rise this year, with 12 per cent fearing they would lose their jobs if they did. We hate to fall back on a well-worn cliché, but if you don’t ask, you don’t get.
Your chances of success are about 50-50, according to Hays research from last year. The firm found 15 per cent of Australians had asked for a pay rise in 2016 and had been refused, while 17 per cent went home with more money in their back pocket.
Make convincing arguments (not demands)
The rising cost of living is the top reason why Australians ask for a pay increase, with 46.4 per cent worried about inflation, the Indeed research revealed. While employers may be sympathetic to your circumstances, this isn’t a particularly compelling argument.
Be prepared to go in to bat for yourself and negotiate hard.
You’ll need to do some research and preparation to really wow your boss during negotiations. Know your worth by checking the salary bands for your industry, role and seniority– are your expectations realistic?
Approach your pay rise request like a high-flying lawyer; gather evidence, build a case and present a clear argument. Emphasise recent praise you’ve received from colleagues or customers and show how your performance has gone above and beyond expectations.
Be ready to negotiate
Skilled negotiators will often tell you to ask for slightly more than you’d be willing to accept. Your boss may make a counteroffer, and – hopefully – they will haggle you down to the figure you always wanted anyway.
If negotiating doesn’t come naturally to you, don’t worry – you’re not alone. In fact, a Picodi survey found Australians are the second-worst hagglers in the world, with only Canadians ranking lower.
Remember, you don’t have to commit to an answer immediately. It’s perfectly reasonable to tell your employer that you need time to think about their offer – even if they meet your expectations.
Prepare for rejection
We’ve all been rejected and it sucks every time. Being turned down for a pay rise is no exception, but that doesn’t necessarily mean it’s game over.
There’s a possibility that your employer simply can’t budget for a pay rise. A separate Indeed survey found nearly half of people whose salary increase requests were denied got told the business couldn’t afford it. However, three-quarters of staff would consider other work perks instead of higher pay.
More annual leave (44 per cent), flexible hours (41 per cent), better health care benefits (28.5 per cent) and paid parental leave (11 per cent) are popular alternatives. Is your employer’s no a hard no? Or is there wiggle room for fringe benefits?
Don’t put your eggs all in one basket (i.e. shop around for jobs)
Okay, so you’ve exhausted all your options and you’ve still come up short on your negotiations. What next? Sulk? Cry? Throw a tantrum? All of these may be tempting immediately after being denied a salary bump, but there is a far more productive choice – look for another job.
You can expect to earn 11 to 15 per cent more when you switch companies in Australia, according to Michael Page. This is probably a lot higher than your current employer would splash out even if your pay rise request was accepted. The prospect of losing you to a rival business may also encourage your boss to reconsider their previous stance on your salary.
Do earnings affect your credit score?
The simple answer is no. Your income isn’t included on your credit report and won’t be a factor that credit reporting systems consider. Higher earnings can still improve your credit rating though, albeit indirectly.
You can use extra cash to pay down outstanding debts, ease your bills burden and give you the financial freedom to organise a more effective money management plan. Ultimately, earning a bigger salary won’t solve any credit problems, but it certainly won’t do any harm.