If you don’t ask, you don’t get. Anyone who’s ever thought about asking for a pay rise before has probably had this old saying swirl in their mind as they dig deep for the courage to broach that all-important discussion with their boss.
That’s right, discussing a pay rise with the “powers that be” can be an incredibly awkward dance many would prefer to avoid. After all, while employees are required to put forward a compelling case for what they’re worth, employers must conduct a careful assessment of their performance against remuneration—and whether they can afford the extra compensation.
With so much at stake, it’s important to handle these discussions correctly. We conducted a survey of over 1000 Australians to gain greater insight into this thorny issue. Here’s what we found.
Millennials are most likely to ask for a pay rise
After all, our survey results reveal that most Australians (60%) secured a 1-3% pay rise the last time their pay was reviewed. This is so close to the rate of inflation that many people may not have noticed much difference.
In fact, the rising cost of living was cited by Indeed survey respondents as the top reason for asking for a pay rise (46.4%), while good old-fashioned reward for performance came a close second (45.8%).
So, it might not come as a surprise that over half (51%) of Australian employees are either already planning to ask for a pay rise in 2018, or are seriously considering it. What’s more, the research also revealed Millennials are far more likely (55%) to ask for a pay rise than their Baby Boomer counterparts (41%).
Why are Millennials leading the charge?
A report by PwC highlights that Millennials have very different attitudes and expectations in relation to their work experiences compared to their parents.
Specifically, Millennials in the workplace are said to be characterised by their desire for learning and development opportunities, flexibility, and rapid career progression, while they expect to be rewarded and recognised for all their efforts. If these needs aren’t met, they may just move on. Research by Gallup shows Millennials are the age group most likely to switch jobs, with 60% of them open to new opportunities.
However, there’s good news no matter what age you are. Whether Millennial, Boomer, or something in between, it could be worth asking for more money regardless. Less than one fifth (17%) of survey respondents said they had asked for a pay rise and been refused.
Attracting and retaining the top talent is a top priority
Employers understand the importance of attracting and retaining the best talent in this highly-competitive, innovation-driven environment. To this end, failing to adequately assess employees’ pay can prove costly for businesses.
While unsatisfied workers are said to be 22% less productive on the job, such employees may simply take their sought-after skills to higher-paying competitors. Over half (52%) of Australians say they’d either definitely or possibly consider alternative employment to secure a pay rise, compared to only 34% who said they wouldn’t.
And let’s not forget about the expense of hiring and training replacements – or the difficulty in sourcing top talent in the first place without a competitive pay packet on the table. A report by management advisory company CEB suggests the average cost-per-hire is $5000 and takes an average of 68 days.
Top tips for handling pay discussions
A positive combination of changing attitudes to work and the leverage talented workers now have in the labour market could be the driving forces that finally improve Australia’s record of stagnating wage growth.
Whatever happens, employers and employees alike have to prepare. Before entering any discussions, it’s important for employees to think about how they can demonstrate exactly why they believe they deserve a pay raise.
For example, depending on job type, it may be possible to show figures and statistics that support your performance or, alternatively, evidence of recognition or testimonials from others within the business could serve the same purpose.
All this information gathered can be used to draw a clear picture of how responsibilities and accomplishments compare to the average market rate for professionals of a similar calibre and experience. Indeed’s own salary tool can help employees search for information on their job titles, such as salary distributions, the most commonly reported salary, and more.
In turn, employers can use this information to ensure employees’ pay is competitive for their specific roles, responsibilities and achievements to avert the risk of talented staff members leaving for higher salaries elsewhere.
When employers and employees are on the same page, it’s a win-win situation. Employees feel rewarded for the work they do, employers feel like they’re getting great value for money, and both sides are more likely to achieve great results.
Methodology: This survey was conducted by Censuswide on behalf of Indeed and surveyed 1,006 currently employed Australians in December 2017.