Want a pay rise for Christmas? How to renegotiate your salary for 2023

With the labour market likely remaining tight into 2023, the time has never been better for you to negotiate a better salary package.

And while some employers may not be willing – or able – to boost the size of your pay packet, there are other perks that could be worth asking for. Many organisations would be willing to renegotiate salary packages in the current tight jobs markets to avoid having to replace workers who leave.

While some employers may not be willing – or able – to boost the size of your pay packet, it can’t hurt to try.Credit:James Davies

In the US, UK and Australia, unemployment is at its lowest levels since 1974. Older workers, or ‘baby boomers’, are leaving the job market and there simply aren’t enough workers to replace them. This means job vacancies are sitting at near record highs, so the time is ripe to renegotiate your salary package for the new year.

For many people, wages have barely moved in years. Nationwide, average wages grew just 1.9 per cent over the 12 months to May 2022, whereas company profits surged 28.5 per cent over the year to June 2022, data from the Australian Bureau of Statistics reveals. So many employers can afford to share the spoils with their workers. But if your employer won’t grant you a pay rise, they can probably afford to reward you with non-monetary benefits, so ask for what you think is fair and reasonable.

One common request from workers is to ask for an extra one or two weeks of annual leave as it’s not uncommon for employers to grant employees five or six weeks of annual leave. It doesn’t cost the employer much, but it can confer real benefits to workers – time off to relax, take a holiday or simply work a little less. Depending on your circumstances, it’s also worth asking your employer about paid maternity or paternity leave options that more companies are offering.

Employees need to show they are adding value to the organisation when asking for a salary increase.Credit:Igor Stevanovic / Alamy Stock Photo

There are several other things that workers also value greatly, such as greater flexibility in working hours and working from home. If you’re asking for WFH to be maintained or increased, framing it in terms of the benefits it would provide to the business is essential because many employers are winding up such options. You may need to convince your employer that you work more productively from home than in the office.

Many organisations also offer training on the job or pay for their employees to enrol in university courses relevant to their role. Check with your human resources department or manager on what professional development benefits they can offer you. Some employers might be willing to help graduates pay off their HECS debt to lure staff to their organisation in this very tight labour market.

Other benefits you could ask for include subsidised gym membership, health insurance, car parking, childcare or meals on the job. Some employers will add to your superannuation, often up to 15 per cent of your wage, adding another 4 to 5 percentage points on top of the compulsory level, so it’s worth asking.

But at the same time, be prepared for questions that your boss will inevitably ask you to justify your request; you need to show your employer that you are adding value to the organisation. Have examples of your loyalty and productivity ready. Include any dollar figure or percentage improvements in sales or profit if that is relevant to your role. The more you can prove your value to the organisation, the greater the chances that your requests will be granted.

Your employer probably knows that if you’re not happy in the workplace, then you could look for another job that pays better or offers more benefits. Workers are indeed voting with their feet, with the most recent data from the Australian Bureau of Statistics (ABS) revealing the national turnover or ‘quit’ rate struck 9.5 per cent over the year to 28 February 2022, the highest level since 2012. That rate could rise further in 2023 as employers fight for staff amid a national skills shortage.

Many workers are willing to leave to negotiate a better salary package if they can’t get what they want, or deserve, from their existing employer.

  • Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

Kris Grant is the chief executive of management consultancy, training, and recruitment firm ASPL Group.

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