It’s shaping up to be the hottest job market in a decade, as a combination of The Great Resignation and historically low unemployment rates threaten to create the perfect storm for Australian businesses in 2022.
With the balance of power having shifted from employer to employee in recent months - as the worst of the COVID pandemic now seems behind us - many are predicting increasing wages in the coming 12 months as a result.
So, could now be a good time to negotiate a pay rise?
A report by leading global advisory group Willis Towers Watson recently suggested that might be the case, since “employers in Australia are expecting an average salary budget increase of 2.5 per cent for 2021 and 3.4 per cent for 2022.”
Although the report doesn’t specify if this is likely to be due to an increased headcount, or that employers are expecting to pay more for their existing staff next year, it seems clear that now is as good a time as any to raise your salary expectations.
But what is the best approach to take when negotiating a pay rise?
Do your research
As with any negotiation, it’s important to come prepared. If you are going to be asking your employer to pay you more, it’s important to know your value and what you are worth in the marketplace.
Look into salary surveys for your industry – most big recruitment firms will have them on their websites – and identify what you could earn elsewhere.
You can use this information to get an equitable pay structure for your current role, but it’s important not to use it as a threat to leave - employers won’t react well to that. It's much better to point it out gently, and premise it with the fact that you don’t intend to leave.
Ultimately, you are in charge of your own career. Think strategically about your next move, even it that move is to stay with your current employer for now.
Your employer is going to have to share the belief in your value, not only to the broader market, but also to their organisation. As a result, you need to differentiate yourself from others by identifying what makes you unique.
The most important thing is to show that you’re a specialist, because if you are a commodity, you’re replaceable.
Consider building a business case for your proposed pay increase, listing what skills you have that others in your company or team maybe don’t. Then detail how these skills help the company make or save money.
By demonstrating how you add value to the company, as well as what you are worth externally, you’ll have a compelling case for an increase in salary.
Be prepared for extra responsibility
One factor to consider in a negotiation is that it’s a two-way process, and both parties need to see value to achieve a successful outcome.
When negotiating a pay rise, be prepared for your employer to ask you to take on extra responsibilities or tasks in your role. They are more likely to see value if there is something you can do in addition to what your current role requires of you.
It may be that you are already doing these, so dig out your current position description and work out if there are tasks that you do that are outside of what is described. Make sure to mention these in your conversation.
However, it’s a fine line to tread. You don’t want to take on twice the workload for a minimal pay rise. Most employers will be reasonable in their expectations, and if they aren’t then maybe it’s time to look elsewhere anyway.
There’s no doubt the next few months are going to be a great time to negotiate a better deal for yourself at work, and your employer is likely to be aware of this. If you conduct the negotiation in a thoughtful and respectful way, rather than issuing an ultimatum, your boss is much more likely to grant your wishes.
They are also likely to have a lot more respect for you, and be impressed with the professional way you have handled the request.
Creating a win-win situation that both parties are happy with is by far the best outcome for all concerned.
Finally, don’t be shy in asking. It’s not unreasonable in the current job market to approach this subject, especially if you do it in a thoughtful and structured way.