Time for your next pay rise?
It’s important to get paid what you’re worth, for your self-esteem and your bank balance too. Find out what’s going on with wages and jobs in Australia and whether you should ask for a raise.
Haven’t had a decent pay rise in a while? If you work in Australia, chances are you’ve seen very little change in your basic wage in the last few years, regardless of what industry you work in. And this state of affairs for salaries can be all the more frustrating because economically speaking, Australia is doing OK. We haven’t been in a recession and growth in new jobs has been strong. Prime Minister Malcolm Turnbull can take pride in achieving the promise made by his predecessor Tony Abbott to create one million new jobs in five years. April figures show this target has been passed with the number of new jobs created since the 2013 election sitting at 1,013,600.
No sign of wage slump ending
A modest rise in unemployment was recorded for April 2018, and this is partly because participation in the workforce is at it’s highest in 40 years. But the slowdown in wage growth has been pretty steady for some time, with Wage Price Index (WPI) growth falling for nine straight months to the end of March 2018. Seasonally adjusted WPI figures show just a 2.1% increase in wages over the year. Public sector workers are doing slightly better with a 2.3% annual increase compared with 1.9% for the private sector. Inflation is currently at 1.9% so the average private sector worker is no better off in real terms than they were 12 months ago.
Be in it to win it
In spite of all these new jobs promised and delivered, sluggish wage growth seems to be sticking around and could certainly make it pretty tough to convince your boss you’ve got a strong case for a pay rise. On the other hand, if you don’t ask you don’t get as a March 2018 report by comparison site Finder shows. In their survey of 2085 people, 3 in 5 who asked for a pay rise got one, receiving an average increase of 5.43%. That’s well over double the current WPI figure of 2.1%.
However, the survey also shows alarming results for how successful men are compared with women in the salary increase stakes. Men achieved a higher average increase of $3919 compared with women ($3697). This goes some way to helping us understand why the gender pay gap in Australia is as high as it is, with men earning 15.3% more on average for doing the same jobs as women. As well as being less successful in their negotiations, part of the reason could also be because women aren’t as likely to come forward and ask. According to the same survey, almost twice as many men as women asked for a pay rise –32.2% compared with 18.5%.
All fair and above board
Knowing what others are paid can be important when it comes to deciding how much to ask for yourself. When salaries are cloaked in secrecy you can feel like you’re selling yourself short if you ask for a modest raise or being greedy when you expect a lot more.
A number of countries are certainly putting pay transparency high on their policy agenda, in a bid to eliminate the gender pay gap. In the UK, mandatory gender pay gap reporting was introduced in April 2017. The new measure requires all UK organisations with 250 or more employees to publish gender pay gap figures by April 2018and take action to close any reported gap. Iceland have taken it a step further by making it illegal to pay women less than men. From 1 January 2018, all companies in Iceland with more than 25 employees will need a government certificate to prove pay equality for their remuneration or face fines. This bold move should come as no surprise from a country that has been ranked best in the world for gender equality by the World Economic Forum for nine consecutive years.
Should I be asking for more?
Regardless of whether you’re a man or a woman, if you have a sneaky feeling you should be asking for a raise, here are 5 excellent reasons to have a conversation with your boss or HR manager about your salary:
- Your job description hasn’t been checked against comparable roles in other organisations for years. Benchmarking rewards within your sector is a reasonable way to settle on a fair rate of remuneration.
- You always reach assigned goals – or often exceed them – and go the extra mile to help your team.
- You have no timeframe or progress measure for when you can expect your next pay rise and no knowledge of what the amount of your pay rise is linked to.
- You see your company spending money on other things but keeping salaries much the same.
- You’ve raised the issue of a raise in the past and your boss knocked you back, saying ‘you’re lucky to have a job at all.’
Make sure you take a look at some tips for negotiating for a pay increaseto help you prepare. And if tackling the issue of pay in a clear and reasonable way doesn’t get you anywhere, have a good long think about whether you’re really valued by your employer and what the future might hold if you stay in your current role.
Thinking about asking for a pay rise soon? Get tips for negotiating for a pay increase and give some thought to the real cost of shifting the work/life balance before you decide to take on more responsibility.
 ABC News, Unemployment edges up to 5.6 per cent despite another jump in new jobs,Stephen Letts, 17 May 2018“Prime Minister Malcolm Turnbull welcomed the figures, saying they fulfilled the commitment made by his predecessor Tony Abbott that a Coalition government would oversee the creation of a million jobs over five years.
Having narrowly missed the target last month, the number of jobs created since the 2013 election now sits at 1,013,600.” http://www.abc.net.au/news/2018-05-17/unemployment-employment-april-2018/9768998
 ABC News, Unemployment edges up to 5.6 per cent despite another jump in new jobs,Stephen Letts, 17 May 2018 “The labour force participation rate was the highest it has been since the series began in 1978,” Australian Bureau of Statistics chief economist Bruce Hockman said.” http://www.abc.net.au/news/2018-05-17/unemployment-employment-april-2018/9768998
 ABC News, Australian workers continue to see wage growth mired near historic lows, Stephen Letts, 16 May 2018, “Wage growth has now decelerated for three consecutive quarters”http://www.abc.net.au/news/2018-05-16/wage-price-index-march-quarter-2018/9766438
 ABC News, Australian workers continue to see wage growth mired near historic lows, Stephen Letts, 16 May 2018, “On seasonally adjusted basis, the Wage Price Index is up only 2.1 per cent over the year, with private sector workers’ wages up 1.9 per cent, outpaced by a 2.3 per cent increase in pay for the public sector.”http://www.abc.net.au/news/2018-05-16/wage-price-index-march-quarter-2018/9766438
 Sydney Morning Herald, Time to ask for a pay rise, Caitlin Fitzsimmons,3 April 2018“Nearly three out of five Australians who’ve recently asked for a bump in their pay packet received one. That’s according to a survey of 2085 people in March conducted by comparison site Finder.”https://www.smh.com.au/business/workplace/time-to-ask-for-a-pay-rise-20180403-p4z7l1.html
 Sydney Morning Herald, Time to ask for a pay rise, Caitlin Fitzsimmons,3 April 2018“The average employee received a pay rise of $3817 or 5.43 per cent of income”https://www.smh.com.au/business/workplace/time-to-ask-for-a-pay-rise-20180403-p4z7l1.html
 Workplace Gender Equality Agency, Australia’s gender pay gap statistics, February 2018,https://www.wgea.gov.au/sites/default/files/gender-pay-gap-statistics.pdf
 Sydney Morning Herald, Time to ask for a pay rise, Caitlin Fitzsimmons,3 April 2018“Women were much less likely to put their hands up, with less than one in five women (18.5 per cent) asking for a pay rise, compared with nearly one in three men (32.2 per cent).”https://www.smh.com.au/business/workplace/time-to-ask-for-a-pay-rise-20180403-p4z7l1.html
 GOV.UK, Gender Pay Gap reporting goes live, 6 April 2017, “Voluntary, private and public sector employers with 250 or more employees will be required to publish their figures by April 2018.” https://www.gov.uk/government/news/gender-pay-gap-reporting-goes-live
 GOV.UK, Gender Pay Gap reporting goes live, 6 April 2017, “These requirements will help employers to identify the gaps in their organisations and take action to close their gender pay gap.”https://www.gov.uk/government/news/gender-pay-gap-reporting-goes-live
 Business Insider, Icelandhas made it illegal to pay women less than men, Emma Wills, 3 January 2018 “Under the legislation, firms that employ more than 25 people are obliged to obtain a government certificate demonstrating pay equality, or they will face fines.” http://uk.businessinsider.com/iceland-has-made-it-illegal-to-pay-women-less-than-men-2018-1/?r=AU&IR=T
 Business Insider, Icelandhas made it illegal to pay women less than men, Emma Wills, 3 January 2018 “The Nordic country, home to more than 323,000 people, has been ranked the best in the world for gender equality by the World Economic Forum for nine years in a row.” http://uk.businessinsider.com/iceland-has-made-it-illegal-to-pay-women-less-than-men-2018-1/?r=AU&IR=T
Online source: Produced by The Financial Financial Planning Association of Australia and published on 30 May 2018. Original article.