What you need to know before going into pay reviews – The Prosperity Project

Many employees are expecting to get a pay rise this year – but will businesses be able to meet those expectations? Photo / 123RF

Employers and business owners will feel the pressure from employees expecting pay rises this year.

The financial year is coming to a close for many businesses this month, and for a lot of those companies, it means pay review season is coming around as well.

Shay Peters, chief executive Australia and New Zealand for recruitment agency Robert Walters, told Nadine Higgins on the Herald’s personal finance podcast, The Prosperity Project, that typically most businesses offer cost of living and inflation adjustments.

“But that hasn’t been the case in the previous two years.”

In Robert Walters' annual survey this year, only 10% of respondents felt they were earning what they are worth.

" I think at the moment, this is heightened by the fact that there has been a lack of material pay rises over the past two years," Peters said.

“The worry for employers here is that if 90% of people believe they’re not earning enough or not earning what they’re worth, when the market starts to moderate or starts to slowly turn that could send a signal that employees will dash to the next opportunity.”

If employers are worried they can’t afford pay rises but still want to retain staff, Peters said they can look at other things they can put on the table, such as working from home and flexibility around hours and shifts.

For employees who feel they deserve a pay rise, he said, it’s important they do their research before going into meetings.

“What an employer doesn’t want to see is someone coming in and laying the fist down on the table and giving some kind of ridiculous number, which both parties know is unrealistic because you’re not going to get any form of respect or credibility in that conversation there. So you’ve got to know what you’re worth.

“Secondly ... you just need to be really open and honest around how things are. So if you’re talking to the employer and saying, ‘cost of living is obviously increasing by X%, I haven’t had a pay rise this year. I’m looking for a pay rise, what is reasonable? What do you think the organisation is able to afford? What does the organisation need from me in return to be able to warrant this pay rise?’

“So it’s making sure you’re entering a two-way dialogue.”

Listen to the full episode of The Prosperity Project for more tips on how to get a pay rise, and what the market says about employee and employer expectations.

The podcast is hosted by Nadine Higgins, an experienced broadcaster and a financial adviser at Enable Me.

You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts. New episodes are released every Monday.