Why millennials are more optimistic about getting pay rises

THREE in five Aussies expect a pay rise this year, with millennials the most optimistic. And there’s a reason why younger workers feel they are entitled.

ALMOST three in five Aussies expect a pay rise this year, with millennials the most optimistic.

The new Workmonitor report from recruitment firm Randstad revealed 57.5 per cent of workers agreed or strongly agreed they would be on a higher wage at the end of this financial year – up from 56.3 per cent 12 months earlier.

Commonwealth Bank senior economist Gareth Aird said the predictions were likely accurate.

“If anything, the figure looks a little bit low to me,” he said.

“If the average wage is going up by 2 per cent, you would expect much more than half (of workers) to be getting a pay rise.”

Younger workers are most optimistic about their salary situation. Picture: Jonathan Ng

The Australian Bureau of Statistics last week revealed average full-time adult earnings grew 2.2 per cent in the 12 months to November to reach $1628 a week or about $84,700 a year.

Wage growth was barely ahead of inflation, however, with the consumer price index (CPI) increasing 2 per cent year on year in the December quarter.

Mr Aird said Australians would need a pay rise of at least 2 per cent to keep up with the cost of living.

The Randstad report revealed younger workers were most optimistic about their salary situation.

Almost three quarters of millennials (72 per cent of 18 to 24-year-olds and 72.9 per cent of 25 to 34-year-olds) expected a pay rise, compared to 55 per cent of 35 to 44-year-olds, 49 per cent of 45 to 54-year-olds, and 46.3 per cent for 55 to 67-year-olds.

Mr Aird said the difference between age groups was unsurprising.

Workers at the early stage of their career believe they have more scope when it comes to moving up the ladder. Picture: Tony Gough

“Younger people would be more likely to expect a pay rise than older workers and I don’t think that’s because of misplaced optimism,” he said.

“It’s because they are at the early stage of their career so have more scope to be moving up and firms generally want to retain younger workers.”

Men (57.9 per cent) and women (57.3 per cent) had a similar level of optimism however, men’s predictions of a larger pay packet rose from last year (up from 54.2 per cent), while women’s dropped (down from 58.3 per cent).

Randstad Australia chief executive Frank Ribuot said ultimately the difference between the sexes was negligible.

“Historically, men tend to be a little more assertive in regard to their career and more sure of themselves, while women tend to be more realistic and a bit more contained in their expectations, but I think it’s really much of a muchness,” he said.

The report revealed overall optimism from workers, with 65 per cent believing their employer achieved strong financial success last year and 70 per cent expecting their employer to perform even better in 2018.

More than half (55 per cent) expected Australia to have a financially sound year that would translate into wage growth.

READ MORE EMPLOYMENT NEWS IN THE CAREERS SECTION OF SATURDAY’S THE COURIER-MAIL, THE ADVERTISER, THE DAILY TELEGRAPH AND THE HERALD SUN.

Originally published as Why millennials are more optimistic about getting pay rises