Pay packets shape our ability to save and invest

Nonetheless, it’s a meagre pay rise, especially as inflation is sitting at 3.5%. And for many Australians, pay packets shape our ability to save and invest.

Rather than waiting for the boss to deliver a pay rise, now could be the time to push for one. This is especially important for women. The Workplace Gender Equality Agency (WGEA) says the gender pay gap between men and women is 22.8% – a difference in take-home pay of $25,792 annually[1].

As I noted in the latest Financy Women’s Index report, this pay gap has to be closed. And employers need to come to the table.

The WGEA found nearly half of employers who completed a pay audit took no subsequent action, many believing gender pay gaps are explainable or justified[2]. But just because a pay gap is understandable doesn’t mean it’s right. Action can and should be taken – and employees can take steps of their own.

For workers of all genders, now could be a great time to approach the boss about a pay rise.

Australia is in the midst of a labour shortage. The latest Seek Employment Report shows January 2022 saw the most job ads on the Seek website in the company’s 25-year history. The number of jobs waiting to be filled was 33% higher than January 2019.

In short, it’s a jobseeker’s market. That puts employees in a strong position to talk to the boss about an uptick in pay.

Asking for a higher pay packet is never easy. But a planned approach can help.

Rather than simply demanding more pay, research the market wage or salary for your role, industry, location and depth of experience. A number of the big recruitment firms publish annual salary guides that can give you a clear figure to work from. Or, head to payscale.com and search your current job title. You’ll get the average salary or wage that a person in your role should be earning.

Compare the figures you find, to your current wage: if you’re getting paid below the average, it’s time to have a chat with your manager to negotiate your salary. If you’re getting paid around the average earnings, then it’s time for a conversation with your manager about the value you bring to your role.

To shore up your case, make a list of the tasks you undertake each working day. Consider any initiatives you may have been responsible for that have saved the company money or boosted revenue. It comes down to highlighting key performance indicators (KPIs) where you can demonstrate you’re worth more money.

Presenting this sort of evidence-based data not only takes the emotion out of a pay rise meeting, it also makes it a lot harder for the boss to knock you back.

If you’re worried about how you’ll handle a pay review, think about having a mock pay interview with a trusted friend or relative. It’s a great way to prepare your responses.

It’s also important to consider whether  your company can afford a pay rise. Some businesses have been hit hard by the pandemic. So keep any pay requests realistic. Have a Plan B too – in case your employer can’t meet your salary increase expectations. This may mean setting a date for another pay review in three or six months. Or it could mean  asking for other benefits such as the boss paying for additional study or professional training that enhances your market value.

On the other side of the table, employers need to take conversations around a pay uptick seriously. When a company doesn’t pay fairly, employees will realise there are others that do – and vote with their feet.

Right now, some jobs are in hot demand including roles as diverse as truck drivers, mechanics, and aged care nurses through to software developers and engineers. The war for talent is so intense that some employers are offering sign-up bonuses for $5,000.

The upshot is that there are opportunities to pocket a pay rise. And if the boss won’t budge when you ask, it may be time to move on.

Effie Zahos is an independent Director of InvestSMART, money commentator at Canstar.com.au and Channel 9 Today Show.