In development, David Cawley, a principal with the recruitment firm Hays, has provided useful perspective. These insights are invaluable for employees considering requesting an increase in salary in today’s challenging economic conditions. With Australian wages stagnant since 2012, as reported by the think tank Per Capita, many workers feel the financial strain from rising inflation and increased living costs. A new Finder report released in April found that one in five Australians have requested a pay rise in the last 12 months. This increase in requests is clearly a reaction to the pandemic.
Indeed, we know from a number of studies that men ask for raises much more often than women. Specifically, 24% of men ask for a higher salary first, whereas just 14% of women initiate the request. Cawley can’t stress enough that there is a right way to negotiate salary. He counsels staff members to come into these conversations very prepared, loaded up with the exact dollar amount or percentage that needs to be raised.
Annual performance reviews are a ripe time for these conversations, especially in big corporations. Cawley wants to stress that timing is the most important thing for smaller businesses. Employees need to consider the business’s financial calendar before beginning making their case.
I mean, there’s certainly some enlightened employers, forward-thinking employers, who will kind of broach that topic and even have those conversations, you know, through annual reviews, performance reviews. I think overall I would say that needs to come from the employee,” Cawley said.
Cawley urges staff to back up their asks with robust research and logical rationale. Rendering them invisible ultimately, knowing your worth in the context of the larger organization is key. He urges workers to ask themselves, “Why am I indispensable to my organisation?” This self-assessment can help provide the foundation for a strong argument in favor of a pay raise.
The economic context further raises the stakes of these negotiations. For at least a decade, Australian wages stagnated by comparison to their own historical averages. Consequently, the average annual wage is almost $12,000 below where it should be. This lack of growth has contributed to an overwhelming sense of feeling underpaid and undervalued.
“Salary’s not everything. Actually, a lot of the research we conduct and a lot of the feedback we get is salary is important, but time back is more important, and that’s worth more than dollars,” he explained. Employees will want to advocate for extra leave or hybrid/remote work options. This is even more critical if a pay raise is not possible.
Approaching a raise, workers should be aware of their employer’s recent track record, too. For companies that are undergoing financial hardship, there may be a lower appetite for salary increase requests. Cawley warns employees against poorly timed requests: “If the cafe’s been closed through December and January because it’s the holidays season, your timing’s probably not going to be right if you bowl up on the first of February and say ‘Right, we’re reopening — I’d like a raise.’”
Another tactical consideration is using competitive bids to your advantage in negotiations, but this should be done with caution. Cawley advises that employees mention external opportunities tactfully: “My advice would be that you have been approached by other opportunities and at this stage, you’re really happy, you’re comfortable in the organisation that you’re in and in your position — but it has obviously made you think because one of the components of those jobs is a higher salary.”
Lastly, getting input from colleagues you trust or even family and friends can offer priceless moral support when getting ready for these conversations. Cawley highlights the emotional aspect of negotiation, stating, “There’s a lot of content out there that’s going to help you from a ‘how to structure’ — but actually it’s probably the emotion, in terms of how you deliver and broach that conversation that’s gonna help you improve on the negotiation.”
