The $3400 pay rise you deserve – and how to get it

Your finances have two basic parts: money in and money out.

The money that flows out of your hands should soon be a little less, thanks to the forecast for up to four rate cuts this year, with NAB even predicting a double on May 20.

But it’s also possible your money flowing in should be higher.

Wages growth has now caught up to inflation, but many workers’ pay packets are not reflecting this.Credit: Dominic Lorrimer

Since inflation spiked several years ago – and the price we paid for everything went sky-high – our pay packets have failed to keep up.

Consumer price rises ran at more than double the rate of wage rises for a time; when the consumer price index peaked at 7.8 per cent in December 2022, the wage price index showed annual growth of only 3.4 per cent.

Businesses, of course, were far from immune from the cost increases in everything from their rents and electricity to food or other input materials, and the budget for staff was significantly squeezed.

Even if you aren’t successful in a pay rise request, having the conversation probably makes you more likely to get one next time.

But it may surprise you to learn that wages price growth caught up to the inflation rate about a year-and-a-half ago. And against the background of an extreme shortage of workers, there’s been a quiet “income recalibration” by a band of astute employees who have won decent pay rises.

Of those who stuck their hand up and said, “Hey, pay me more!” an astounding 84 per cent of employers have apparently said yes, or so says a new survey by Finder.

Only 19 per cent of Australians – equivalent to 2.8 million people – requested a salary increase in the past year, and four-in-five were successful in some way. How much did they get? On average, $3388 extra a year.

So, it seems – despite wages growth now sitting at only 3.2 per cent officially – there is some concerted movement on pay packets.

Six per cent of employees received more than they asked for, 5 per cent scored exactly what they wanted, 5 per cent were given less than what they’d hoped, and 22 per cent received a rise without asking.

It seems there’s more movement for males than for females. The other, frankly shocking, thing adding to the gender pay gap – still 11.9 per cent, according to Finder’s survey – is the gender pay rise gap.

Men reported securing an increase of $3990 on average, compared with $2424 for women. That’s virtually 40 per cent less.

And men are still more likely to have asked for a raise in the first place, 24 per cent versus 14 per cent for women. As they say, if you don’t ask, you don’t receive.

But, male or female, what’s the pay-rise game plan that gives you the most chance of winning one? To get the answer you want, try these tactics:

• DON’T ambush your boss with a random request – no one, when cornered, gives a considered response.
• DO send an email or message asking for a meeting and politely outline the reason.
• DON’T go to that meeting unprepared, or citing your higher costs as qualifying you for a higher salary. It doesn’t.
• DO collect evidence first that you have met your key performance indicators (KPIs). More importantly, if relevant and possible, get evidence of your contribution to the organisation’s bottom line. When the company is earning more because of you, you could earn a greater slice of it.
• DON’T bowl in and be demanding.
• DO try to first show aligned interests and position yourself as someone who makes your boss’ life easier before outlining what you would like in return.

And remember, even if you aren’t successful in a pay rise request, having the conversation probably makes you more likely to get one next time.

Realise, too, that concessions can improve your bottom line, so you can also always try that. Reduced or different hours or increased work perks, say an allocated car park or staff lunches, all ultimately add up.

And if you’re like many Australians, time and money savings from working from home could be worth their weight in gold.

Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at www.nicolessmartmoney.com. Follow Nicole on Facebook, Twitter, and Instagram.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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