Yahoo Finance How to negotiate a pay rise for 2024: 'I knew my market value'
Stubborn inflation means Aussies are working harder for much less.
With inflation sitting at 5.4 per cent, hard-working Australians are working harder for less purchasing power, as salaries continue to lag behind the cost of pretty much everything.
Despite promising wage growth at the end of the September quarter, many are still left hoping for an increase to their household bottom line.
Here are six tips to help you negotiate a pay rise for 2024.
1. Be willing to play the long game
Suzie, 43, from Victoria works in IT services and recently negotiated a substantial pay rise. At her annual review, she was offered a 2.2 per cent increase to her base salary, and a 25 per cent increase on her bonus.
“In the first meeting, I didn’t say too much – that was my plan, not to give anything away,” she said. “I then told them I wanted time to consider before signing the document.”
Suzie’s experience is a reminder that not all pay negotiations have to happen at the time of the initial discussion. It’s OK to take some time to take stock, do your research, and come back to the table.
2. Compile evidence of your achievements
It can be tempting to offer up a raft of reasons why you need a pay rise, but keeping it focused on the mutual exchange of value is often more successful. Leave out your personal reasons for wanting a pay increase, like your mortgage repayment or other increased costs.
Instead, come to the discussion with a log of your recent achievements. Make a case of evidence detailing why you’re providing additional value to the business. Doing so can even help score you a pay rise beyond a standard CPI percentage.
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In Suzie’s situation, she returned to her employer with a case for why she wanted more than they’d offered.
“I basically said, 'Look, I think you’ve undervalued what I bring',” she said. “I had a list of all the things I had achieved that had brought value to the business unit.”
3. Know your market value
For Suzie, having an idea of what other similar roles were offering helped her stand her ground.
“I knew my market value,” she said, explaining that she kept an eye on Seek and LinkedIn, and would sometimes apply for roles or even go as far as interviewing for them to find out what was on offer in the market.
4. Keep it neutral and pragmatic
Managing your emotions is key to a productive pay rise conversation. Money can be a difficult topic to discuss, especially during periods of economic uncertainty and in environments where you’re vulnerable.
Practising what you want to say ahead of time can help you remain neutral during the conversation, and keep you focused on the salient points of your request. To help, Fair Work Australia offers a free online course, Difficult Conversations in the Workplace, which contains advice for employees looking to establish more effective communication with their boss and/or colleagues.
5. Understand what a pay rise actually means for your take-home pay
The more informed you are when negotiating, the better positioned you’ll be. When we’re talking about increases to annual salaries, we can lose sight of the impact on our household budget. An extra $5,000 might sound great, but how much is actually going into your pocket?
Inputting different salary levels to Paycalculator.com.au can help you understand what different numbers will mean for your weekly, fortnightly, and monthly pay, and help you settle on a number worth aiming for.
6. Consider whether it’s time to move on
If your negotiation efforts aren’t landing you a pay rise with your current employer, it could be time to consider moving on. In a recent TikTok, professional recruiter and career coach Tammie Christofis Ballis shared the “ugly truth” for those looking to increase their salary. “You’ll get a pay rise when you leave your job,” she said.
Tammie’s video serves as an important reminder to Aussies in private sector roles that, sometimes, their greatest chance of a significant pay increase is to leverage their experience with a new employer.
“Learn as much as you can [in your current job] and use that experience to get a pay rise at another workplace,” she said.
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