Salary increases are falling but you can still get that pay rise

IF YOU’RE waiting for that pay rise, stop holding your breath, there’s a slowdown in salary increases. Here’s how to make sure your pay packet continues to grow.

Salary increases are slowing down, in fact, they’re barely outstripping inflation.

IF YOUR pay packet has been stagnating, you’re not wrong. Salary increases are slowing down, in fact, they’re barely outstripping inflation.

The latest wage data paints a flat picture. The Australian Bureau of Statistics said hourly rates of pay, seasonally adjusted, rose 0.7 per cent in the December quarter, and it’s the weakest it’s been in 17 years. The wage index rose 2.6 per cent year on year, which was the weakest annual growth in ABS data history going back to 1997.

Meanwhile, analysis from talent consultant Aon Hewitt found salary increases will be 3.2 per cent in the next 12 months, compared to an average of 4 per cent in recent years.

Add to that a sluggish labour market, a 10-year high in unemployment and job security fears growing sixfold, you might feel this isn’t the best time to ask about getting a pay rise.

But that doesn’t mean you won’t as companies are increasingly fighting hard to hold onto good talent.

But the key is to distinguish yourself from your colleagues by producing top-notch work. It might sound like simple and obvious advice, but in this environment, where there’s less money to go around, it’s more important than ever.

Crucial to this is to not be dragged down in a spiral of demotivation just because your bank balance hasn’t increased as much as you want it to, as fast as you want to.

Aon Hewitt senior consultant Shannon Dooley said the challenge for employers is to be more creative about rewards. He argued there shouldn’t have to be an increase for everyone and that higher salary increases should be reserved for top performers.

“When times are tough, companies simply can’t afford to increase salaries significantly, meaning focus may be better placed on other areas of the total rewards remit and/or truly differentiating performance,” he said.

“When organisations have reduced review budgets they need to get creative, particularly when lower average annual increases may not be enough to retain the best talent.”

Mr Dooley also said while increases have certainly slowed down, it hasn’t fallen off a cliff. “We’re not seeing many organisations forecasting salary freezes. They’re just being a bit more prudent and pragmatic.

“Then there are the less financially tangible compensation businesses use to retain staff, such as training budgets and people and culture programs.”

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