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Study Reveals Australians Hesitant to Request Pay Rises Amid Financial Pressures
Recent findings from Finder indicate that a significant number of Australian workers have refrained from requesting salary increases over the past year, despite increasing cost-of-living concerns and inflation eroding the value of their earnings. This reluctance could potentially cost them thousands of dollars.
Key Findings:
- Only one in five workers—about 2.8 million Australians—sought a pay rise in the previous year.
- Among those who asked, approximately 80% were successful in securing some form of increase.
- The overall average salary increment achieved was $3,388, with men receiving an average of $3,990 and women only $2,424.
Expert Insights
Sarah Megginson, a personal finance expert at Finder, highlights the reassuring statistic that over 80% of those who asked for a raise were successful. She urges more Australians to initiate discussions about pay with their employers, stating, “One of my favourite sayings is ‘questions are free’. The answer is always no if you don’t ask, so putting your hand up is always going to boost your chances of a better outcome.”
Megginson expressed concern over the disparity in salary increases between genders. She noted that women not only received smaller raises on average but were also less likely to request an increase. This, she argues, points to the urgent need for improved confidence in salary negotiations and proactive measures from employers to address pay equity.
Missed Opportunities
Among the 80% of Australians who did not request a pay rise, a staggering 59% stated they neither asked nor received an increase. Meanwhile, 22% who avoided asking still received a raise. Other outcomes included:
- 5% received more than their requested amount.
- 5% got exactly what they asked for.
- 5% received only part of the increase they sought.
Additionally, job security concerns appear to be a factor influencing workers’ hesitation, with 15% of women and 10% of men reporting feelings of job insecurity.
Current Job Market Trends
The Australian unemployment rate increased slightly to 4.1% in March, up from 4%, reflecting a cooling job market. Economists have noted fewer job additions compared to previous years. Data from SEEK revealed a 3% drop in job ads month-on-month in March, coupled with a 12.8% decrease year-on-year. Concurrently, competition for jobs has increased, as applications per ad rose by 2%, reminiscent of levels during the pandemic.
Dr Blair Chapman, a senior economist at SEEK, stated, “Labour market demand continues to cool, with March marking the second consecutive month of falling ad volume. However, the quarterly view suggests demand is a little more robust with only a small decline and an increasing number of industries experiencing growth.”
Wage Growth Analysis
According to the Australian Bureau of Statistics, the Wage Price Index rose by 0.7% in the December quarter and 3.2% over 2024, marking the slowest quarterly wage growth since March 2022.
Recommendations for Salary Negotiations
Megginson encourages employees to consider their current salaries and advocates for proactive communication regarding pay rises. Here are her tips for navigating salary discussions effectively:
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Research: Understand salary benchmarks for your role, industry, and experience. Useful resources include Glassdoor, SEEK, and industry reports by companies like HAYS.
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Emphasise Value: Prepare to highlight your achievements and contributions, illustrating how you’ve positively impacted the company through improved revenue or efficiency.
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Choose the Right Time: Timing your request after a successful project or during performance reviews can significantly increase your chance of success.
- Plan for Alternatives: If a salary rise isn’t feasible, negotiate for other benefits such as additional leave, flexible arrangements, or performance bonuses.
By employing these strategies, Australian workers may find greater success in their negotiation efforts, ultimately helping them to secure fairer compensation in a challenging economic landscape.
Conclusion
As inflation impacts the value of salaries and economic uncertainty prevails, the importance of advocating for fair pay becomes ever-more critical for Australian workers. With many missing out on potential increases, addressing job security concerns and cultivating negotiation confidence could change the landscape of employee compensation in Australia.
