Secrets to successfully bagging a pay rise

For years and years, economists and business commentators, myself included, went on and on about the economic risks Australia faced from a slowdown in China.

Now while those risks still exist, there’s a more sinister, recurring economic cancer, hurting Australian workers: low wage growth.

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For years now, wage growth, as measure by the Bureau of Statistics’ Wage Price Index (WPI) has been growing at a snail’s pace.

It’s such a blight on the economy that in the recent Reserve Bank minutes – the document that’s basically a fly-on-the-wall commentary of what’s said in the bank’s monthly interest rate meeting — the RBA listed low wage growth as the equal biggest risk to the entire economy.

Why? Well because if wages aren’t growing strongly enough, or even as fast as inflation, shoppers aren’t going to keep going out to the shopping malls and department stores around the country… which ultimately helps support the economy.

Admittedly, wage growth has been slow for some time, and consumers have opted for credit card debt, rather than organic wage growth, but, all the same, that can’t last forever.

Sooo… how do we boost your pay packet?

Let’s take a look.

Government’s answer

The government is confident wages will pick up naturally. What do I mean by naturally? Well simply that the recent jobs boom will create enough “tightness” in the jobs market that employers will be only too happy to offer higher remuneration, or pay rises, in order to secure talent.

The logic behind that is that every company is competing for talent and if you see someone first, you’re likely to offer them more money in order to retain them.

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Of course the lower the unemployment rate goes, the more this holds true.

At “full employment”, and if the economy keeps expanding, all the power goes to the employee. The worker simply demands a pay rise and, if they don’t get it, go to a company that will deliver one to them.

While all this works in theory, it hasn’t worked in practice. That’s partly because even as more jobs have been created, more workers have entered the labour force (or the search for a job)… so there’s still plenty of people who would happily take someone else’s job for lower pay right now it seems!
Companies too, have been rewarding investors over employees when it comes to the distribution of profits.

Academics

Industrial relations expert, John Buchanan, argues that wage negotiation needs to be institutionalized again. He wants to see a return to the 1970s when those who couldn’t effectively negotiate a pay rise were helped along by the law.

He says, decades ago, highly skilled, experienced workers, used to effectively negotiate higher pay.

Then, an arbitration commission, would say, ‘well if that company was able to sustain a pay rise for those workers, pay rises all round then!’

It was dubbed wages of the strong supporting wages of the weak.

Union response

Unsurprisingly unions are all for this kind of hand-holding for the weaker wage negotiators.
Unions say the current system is unfair and inequitable. And they’re right… or are they?

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Through a series of industrial relations reforms, the 1990s saw a system of enterprise bargaining introduced. It leaves wage determination up to workers and, more importantly, the market. The problem when you hand wage determination over to institutions, and away from the market, is that distortions start to emerge – making overall economic growth even harder to achieve.

What if we could somehow given workers more bargaining power?

NIDA

This is where the National Institute of Dramatic Arts (NIDA) comes in.

NIDA understands that not everyone has the ability to confidently walk into a wage negotiation meeting, and walk out with a 10 per cent pay rise.

It holds courses for people specifically aimed at training workers up to effectively negotiate a pay rise.

The ABC actually sent me along to one of these courses, so I thought I’d share my experience with you briefly.

Here are some key takeaways (10 point plan):

1. As a daily ritual, work on your self-confidence. Remind yourself daily of 5 attributes (physical and mental) that make you someone special.

2. If nerves get the better of you, practice breathing exercises. Breathe from below your belly button – not your chest.

3. Cloak and crown. Before you enter any wage negotiation, put on an invisible cloak and crown. That is, literally walk around like you are a king or a queen. Feel the weight of the cloak behind you, and the loftiness of the crown, and own the space you walk in.

4. Enter the negotiating ‘arena’ with pep. So not too much energy, but enough energy to be engaging to be with.

5. Know the personality type of the person on the other end of the negotiating table and match it.

6. State your claim in a positive and reasonable way: why you are asking for a pay rise, and why would it be good for you, your boss, and the company if you received one.

7. Listen to what your boss is saying to you. Every word. And don’t respond until he or she has finished speaking.

8. Never use “but”. Always use the word “and” within sentences in responding to someone. It will help you to keep them onside.

9. If you can’t negotiate a pay rise, ask your boss for a plan of action to move towards the possibility of a pay rise in the future.

10. Organise to meet again soon.

Now I wouldn’t even dream of thinking this is enough for you to take in right here right now. The course took me 3 hours to complete and it’s my understanding that most of the courses run over two days. Rather, if you have the time, and a little money (for education), it’s worth thinking about doing at least something to help you gain important negotiating skills.

Why stop at wage negotiation?

Heck, it’s not just about asking for a pay rise. This goes far beyond that. It covers all aspects of life including: job interviews, company meetings, and, heck, even dating! The NIDA course is designed to help you find your authentic, confident self.

The purpose of the NIDA course is to equip you with the interpersonal skills in order to pull off a successful pay rise negotiation. The bottom line is that if pay rises aren’t coming naturally, you have to push for them… so it has to come from within yourself. This ain’t a bad place to start that process.
In all honesty, what have you got to lose?