How to ask for a pay rise in 2022
With the new financial year upon us, and the labour market tightening rapidly, now could be the right time to ask for a pay rise. Many employers will be willing to pay their staff more in the current jobs markets to avoid the headache of having to replace a key staff member.
If you do ask for a pay rise, you should be well prepared for questions your boss will inevitably ask to justify a larger pay packet.
While the Reserve Bank Governor Philip Lowe recently said he wants wage growth to be capped at 3.5%, that is wishful thinking given jobs ads are at a record high level, the unemployment rate is just 3.9% and the skills shortage is worsening.
Employers can't get the staff they need, and are paying more to retain existing staff.
So, if you haven't been granted a pay rise in some time, or haven't received a decent one, here are seven tips that could make the difference being your boss saying agreeing to a raise or knocking it back.
And remember - if you don't ask, you don't receive!
1. Outline your achievements
You need to show your boss why you deserve a salary increase, so have all the evidence ready.
Prove your value to the organisation with examples of great work, such as sales numbers or other key measures of productivity.
Your employer will want to see how what you contribute to the organisation and what they risk losing if they don't grant you a pay rise.
2. Outline your worth
Research comparable salaries for similar roles in the marketplace. If you're being paid less than that, that's good evidence that you're being underpaid.
Speak to a recruitment consultant that specialises in your field. You could also search current salary surveys for your position, with the same level of experience.
This can add a lot of weight to your request as it is objective evidence of your worth in the job market.
3. Know the economic conditions
It is an employees' market. The jobless rate has fallen to 3.9%, its lowest level in almost 50 years, and we are seeing salaries rise up to 25% in some sectors like finance and IT; other professionals are reaping wage rises of between 5% and 10%. Even the minimum wage jumped 5.2% for 2.8 million workers from July 1.
Inflation is going up to at least 7% by the year's end. So, ask for what you deserve, and that is, at least, for your real wage to be maintained.
Forget about the RBA Governor's advice to cap wage rises to 3.5%. Not even the Fair Work Commission is listening.
4. Practice asking for more
Asking for a pay rise can be nerve-wracking, so it's important to practise. The more prepared and confident you appear, the more likely you will get a raise.
So, practise in front of the mirror and if you can, practice with another manager who leads staff so they can assess how compelling your arguments are and give feedback.
If you haven't prepared well, your employer might think you aren't serious about going elsewhere if they say no.
5. Be courageous
You've done your research, you know what you are worth, so believe in it. If your boss denies your request, keep calm and explain why you are valuable to the organisation.
Now is not the time to be shy - you have nothing to lose, but a lot to gain. And if you are prepared to walk to greener pastures, then tell your employer that.
That may strike fear into their hearts because they know they may not be able to replace you.
6. If you can't get more money, ask for other perks
With inflation and interest rates quickly rising, costs are ballooning for employers.
If your boss says no to a pay rise, it could be worthwhile asking for other perks, such as the chance to work from home more, flexibility on hours, assistance with further education, gym memberships, or free stuff lunches.
7. If the answer is no, ask again, in six months
Just because your employer says no this time, it doesn't mean you can't ask again.
Don't get discouraged because your bargaining power could increase as 2022 rolls into 2023 and the labour market likely tightens even further. Ask again in six months' time, just before 2023 begins.
With a new calendar year, employer might set new payroll budgets for the new year. In the meantime, arm yourself with evidence on your productivity and value to the organisation so you are even better prepared next time.
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