How often should you get a pay rise in Australia?
If you’ve found yourself pondering a pay rise lately, you’re certainly not alone. With annual inflation sitting at a stubbornly high 7%, the population is grappling with higher debts, skyrocketing rents, relentless rate rises and rising costs of living.
The Australian Bureau of Statistics has reported that the household saving-to-income ratio fell for the seventh consecutive quarter to 3.2%, which is the lowest level since June quarter 2008. It’s a telling sign that real wages are likely to continue going backwards unless workers can secure substantial pay increases.
Like many Australians, you might be asking yourself, “how often should you get a pay rise in Australia?” It’s a worthy question if you’re tightening your belt in response to inflationary pressure, however it’s vital information for many other circumstances.
From job hunting career changers to wide-eyed graduates, negotiation novices to self-employed individuals, everyone has something to gain from knowing how to navigate pay rises.
This blog will explore how often you should get a pay rise in Australia, uncovering the factors that influence this pivotal aspect of career advancement and financial well-being.
Related: How does inflation affect employees’ salaries?
With inflation eating into the pay packets of Australian workers amidst a cost-of-living crisis, it’s becoming increasingly important to understand how often you should get a pay rise in Australia.
Generally speaking, most organisations review employee performance and salaries annually, through appraisals or performance reviews. Typically, these organisations will outline specific details in their offer letters or employment contracts.
Annual reviews provide the perfect forum for salary negotiation. A vehicle for constructive dialogue, annual reviews allows you to make a compelling case for a pay rise based on your demonstrated value to the organisation over the past year i.e., your unique accomplishments and direct contributions.
Related: How to justify a pay rise
It’s important to note that while these discussions are scheduled at regular intervals, the employer is not obligated to issue a pay rise at this time. If stipulated criteria, individual KPI’s and/or business targets have not been met, an employer may withhold a pay rise.
Other organisations have no provisions around annual reviews and may employ a more flexible approach. They might consider issuing pay rises when an employee achieves certain career milestones, completes major projects or contributes to organisational success.
Historically, it was not unheard of for pay rises to be issued in line with a 2-3% inflation rate. With inflation currently sitting at a whopping 7%, many employees are receiving pay rises well below this figure (if at all). With wages going backwards in real terms, it’s not so much a question of “how often should you get a pay rise in Australia?”, it’s a question of “what factors can determine a pay rise in Australia?”
While many employees have consciously avoided ‘awkward’ pay rise discussions in the past, the 2023 economic landscape has forced their hand. For many professionals today, the focus is finding opportunities that warrant a pay rise discussion.
With countless professionals questioning, “how often should you get a pay rise Australia?”, it’s important to understand that timing is critical.
Richard Sinden, director at Robert Half, says employees must choose their time wisely. He says, “many assume that pay rises can only happen at one or two intervals during the year. The opposite is true! As an employee, you are entitled to approach your employer at any time and ask for a pay rise. In my experience, the most successful cases always have solid reasoning to back up their request.”
Let’s explore the most influential factors for a pay rise:
As discussed, it’s important to keep abreast of the key company policies relating to salary. Be sure to review your letter of offer and/or your employment contract to identify any clauses relating to things like salary reviews, bonuses and pay rises. Take the time to understand the conditions and criteria that will increase your chances of a successful outcome.
Take note of all the fine print - the most common scenario is that the decision to grant a pay rise is “at the absolute discretion of the employer” or similar. That said, look for any stipulations that impose an obligation on your employer to grant an incentive if certain conditions are met.
If you meet these conditions, you can claim entitlement of a pay rise under the terms of the contract.
Whether you’re seeking a pay rise or not, it always pays to stay abreast of your industry standards and market trends regarding salary.
Before approaching your employer about a pay rise, undertake your own research to identify the standards for your role and level of experience. The Robert Half Salary Guide offers comprehensive salary data and insights to help you determine where your salary sits in the context of market ranges.
If your current salary is below the market averages or, if you feel you are worth more, it’s important to justify this to your employer so that you can access fair compensation for your skills and services. Ultimately, research is pivotal in obtaining the objective data that will keep you in the industry loop, helping you to make a compelling case.
Be sure to keep an eye on market conditions and industry trends. If your skills are in high demand, you may have opportunities to negotiate pay rises more frequently.
Interested in current job openings and pay rates? Check out Robert Half’s dedicated Jobs Page
A Robert Half study investigating the determining factors behind salary increases, revealed that Australian employers placed significant value on employee performance.
While 20% said salary increases for existing staff would be based on tenure, 22% said increases would be based on a combination of company and/or individual performance and tenure. *
In the current skills short market, this information is gold.
With thorough preparation, asking for a pay rise can be your opportunity to justify a pay rise. It’s a solid indication that you know your value and that you’re serious about the trajectory of your career.
Leverage your individual performance to present a solid case that circles back to your accomplishments and the value you have brought to your organisation. Be prepared with specific, quantifiable evidence in the form of personal contributions that have had a measurable effect on the organisation’s bottom line.
Related: How to negotiate a higher salary offer via email (sample included)
The effects of this year’s volatile economy are far reaching. We know that wage growth is lagging at less than half the rate of inflation. While it can be tempting to request a pay rise purely off the back of cost-of-living pressures, it’s important to be pragmatic.
With just one in five (22 per cent) organisations planning to factor inflation into their 2023 salary budgets, it’s clear that economic conditions aren’t necessarily cause for a pay rise.
Richard says strategic thinking is the key to success. “In today’s climate, it’s hard for employers to award pay rises solely on the basis of economic conditions. Most people are feeling the pinch so, make sure your pay rise request packs a punch.” He says, “I always recommend that employees strive for success with strategy – highlight the unique value that makes you absolutely indispensable to your organisation.”
“In saying this, it is important you understand the economic climate a business is in when you make a pay rise request. To avoid disappointment, it is advised to be vigilant about understanding how a business is performing amid the current economic landscape, as this can contribute to the decision of honouring the pay rise request or not."
That said, it’s important to investigate whether your company is implementing any salary adjustments to keep pace with inflation. If they haven’t been forthcoming with information, don’t be afraid to instigate a discussion with them about their plans and your own salary expectations.
Once you’re clear on how often you should get a pay rise in Australia, you’ll find it easier to identify the opportunities where you can put forward your case for one.
While these delicate conversations may be daunting for some, they are vital in advocating your worth, securing a fair salary and enjoying career prosperity.
Knowing how to navigate negotiations is the key to justifying a pay rise and increasing your chances of success. Preparation is key, as is proof of your individual achievements.
Present the facts along with tangible information and follow the strategies below to ensure you can come to the conversation prepared.
Before approaching your employer about a pay rise, undertake your own research to identify the industry specific standards for your role and level of experience. Remember to consult the Robert Half Salary Guide to help you determine where your current salary sits in the context of market ranges. This data goes a long way in strengthening your argument!
Related: How to ask about the salary in a job interview
For your request to be successful, it’s essential that you prove to your manager why you deserve a pay rise. The intent is to emphasise the value you have brought to your organisation. Be prepared with specific, quantifiable evidence in the form of personal accomplishments that directly align with successful business outcomes.
Reinforce your value by drawing attention to your commitment to professional growth and development. New responsibilities, professional development activities and training programs are all examples of initiatives to enhance your skills, knowledge and qualifications.
Focus on articulating the skills and expertise you have developed during these endeavours, reaffirming how they align with the organisation’s goals.
Showing that you are invested in the company’s growth and long-term success can help to cement your future value and justify a pay rise.
Outline your future vision, career goals and aspirations to highlight how this aligns with wider organisational objectives.
If your company has no provisions around annual reviews, requesting one could provide a forum to discuss your progress, accomplishments and improvement areas with your employer.
Requesting a performance review shows strong initiative and an appetite for constructive dialogue. It also allows you to make a compelling case for a pay rise based on your demonstrated value to the organisation.
Related: How to discuss a salary hike with your manager
While many employees have felt uneasy about instigating pay rise discussions, others have used the opportunity to highlight their understanding of their worth in the market.
A recent Robert Half workplace survey showed that employee led negotiations were on the rise. Of the surveyed hiring managers, 45% identified an increase in the number of shortlisted candidates who were negotiating in the past year. Similarly, 40% indicated that they saw a rise in the number of existing employees who were negotiating in the same period.
Looking deeper into these negotiations, 44% of the surveyed hiring managers believed that both candidates and employees were more frequently negotiating salary compared to non-salary perks, or both. **
Asking for a raise is an indication that you know your worth, and that you’re serious about your career. Don’t be afraid to be your biggest advocate by:
Being clear on your market value.Outlining your achievements and skills.Quantifying the impact of your work.Showcasing any of your significant contributions.Aligning your contributions to business goals.Presenting a solid case that solidifies you as an invaluable high achiever.
At Robert Half, one of the most common questions we receive is “how often should you get a pay rise in Australia?” While there is no hard and fast answer, it’s important to recognise that the frequency of pay rises is influenced by multiple factors including company policies, industry standards and market trends, individual performance and economic conditions.
Securing a pay rise is made easier by proactively managing your career, consistently delivering organisational value and negotiating when opportunities arise.
Ultimately, your confidence in advocating for yourself is the key to ensuring that your earnings align with your valuable skills and contributions.
Need some extra assistance on the pay front? Explore our range of tools and career advice resources or upload your resume online and we’ll be in touch.
*The study is developed by Robert Half and was conducted online in November 2022 by an independent research company, surveying 300 hiring managers, including 100 CFOs and 100 CIOs, from companies across Australia. This survey is part of the international workplace survey, a questionnaire about job trends, talent management, and trends in the workplace.
**The study is developed by Robert Half and was conducted online in June 2023 by an independent research company, surveying 300 hiring managers, including 100 CFOs and 100 CIOs, from companies across Australia. This survey is part of the international workplace survey, a questionnaire about job trends, talent management, and trends in the workplace.
