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Managing Salary Expectations

Managing Salary Expectations

28 days ago By Emily Harris
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One of the key questions hanging in the air for employees at the end of the financial year, is whether or not they are in line for a pay rise. Because the end of the financial year (30th of June) is when businesses start budgeting and planning for the year ahead, traditionally it’s been a popular time for organisations to inform employees on whether or not their salary package will be changing. In fact, according to a SEEK survey of over 4,800 professionals, 31% said that the end of the financial year – specifically July- was the magic month for pay rises[1] (Sheedy, 2019). 

 However, after the majority of businesses experienced such a difficult 2020 – in June last year, two in three businesses reported decreased revenue compared to the same time in 2019 - will pay rises be on the cards for 2021-22? Employees think so. In a recent Design & Build survey, we asked over 55,000 of our candidates within the built environment sector (construction, engineering and property) what their salary expectations were for the new financial year. While %52.97 of candidates surveyed did not receive a pay rise last year (many citing COVID-19 as the key reason) 36.44% of respondents said they are expecting a pay rise this year, with the majority expecting at least a %5 increase. ​

 So, what does this mean for employers who aren’t in the position to raise salary by this amount? According to the Australian Bureau of Statistics, annual wage growth was sitting at a record low of 1.4% at the end of 2020. Furthermore, recent budget forecasts indicate that the annual wage growth will increase to 1.25% by the end of 2020-21[2](Australian Bureau of Statistics, 2021). Which while positive, doesn't suggest a significant pay rise won't be on the cards for everybody. ​

​It’s important to continuously manage salary expectations with staff – not just at EOFY but throughout the year – in order to minimise dissatisfaction and turnover. However, this is easier said than done. Consequently, Design & Build explore the steps organisations can take to better inform their employees of their payment policies and start conversations around pay that have a productive outcome for both parties, rather than leaving employees feeling disappointed and dissatisfied: 

Uncover The Mystery Behind Salaries 

While many organisations want an individual employee’s salary to remain confidential, they can still provide more context around salaries generally, and how they are calculated. In doing so, each employee gains more understanding of how the process works and consequently will have more realistic expectations on their own salary or future pay rises[3] (Seek Employer, 2019). Discussing the factors that help to formulate a salary, including benchmarking, time in the role and performance, can also help employees to gauge whether their salary is competitive in the workplace and the wider market.

Provide Employees With the Right Information

To make the conversations more constructive, and provide motivation for employees, it is also important to outline what it takes to secure a pay rise in a particular role. This could include completing projects or taking on responsibilities that are above and beyond their job description, performing consistently well against their set KPIs or demonstrating how they add value to both their role, their team and the wider company.

By outlining what it takes to secure a pay rise, you’re providing employees with tangible steps to help in their career progression. And from the employee’s perspective, understanding the criteria needed to be met in order to receive a pay rise makes the process seem more achievable. Which in turn, will help employees to stay motivated and gives them clear guidance on what skillsets to focus on and develop further to become successful in the future. 

Explore non-financial benefits 

If a pay rise isn’t possible, particularly over the next financial year, organisations should explore and consider other benefits to demonstrate to employees how much they value their skills and input. Over the last year -especially with so many people working remotely due to social distancing- flexible working has become a key focus. While not all jobs within construction can feasibly work from home, there are many ways an organisation can implement flexibility, including more flexibility with rosters, time in lieu, or job sharing. When Design & Build asked its own professional network if they would be willing to have access to more non-financial or flexible working benefits instead of a pay rise (e.g. paid study or additional paternal leave), 35.77% of respondents said yes. This demonstrates the value that employees see in non-financial benefits, making it a valid strategy within an organisation’s remuneration strategy. 

Obviously, the needs and desires of every employee will be different, so it’s important to discuss the types of benefits that would be of value to them, before making any formal or blanket decisions. 

Invest In Professional Development 

 Another great way to make people feel valued is to focus on professional development and when conducting salary discussions with employees, it’s important to present all of the professional development options available to them. Offering a clear career progression pathway, like a leadership course or opportunities for employees to upskill, demonstrates to your employers that you believe in their talent and are committed to developing it. It will also provide employees with the opportunity to develop and learn new skill sets, which not only make them a greater asset to the company but help them to progress further in their own career and increase the likelihood of future promotions within the company. 

Upskilling also doesn’t have to be expensive external training or courses – many organisations implement strategies like secondments, knowledge sharing (where a consultant who specialises in one skillset or knowledge base, demonstrates their learnings to the greater team) and cost-effective online short courses. 

Ultimately, discussing salary is never an easy conversation and informing employees that they won’t be receiving a pay rise will always incur some disappointment. But providing greater context into how salaries are set, and providing key tools and benefits to help employees achieve this in future, can minimise long-term dissatisfaction and still manage to make employees feel like a valued member of the organisation.

Contact Us

For more information on the results of our latest salary survey, you can contact us at info@designandbuild.com.au


 [1] Sheedy, C. 2019. What’s A Pay Rise Worth? Seek. Retrieved from: https://www.seek.com.au/employer/hiring-advice/whats-pay-rise-worth 

[2] Australian Bureau of Statistics. 2021. Annual Wage Growth Remains At 1.4%. Australian Bureau of Statistics. Retrieved from: https://www.abs.gov.au/media-centre/media-releases/annual-wage-growth-remains-14

[3] Seek Employer. (2019). Three Steps To Better Salary Conversations With Your Staff. Seek. Retrieved from: https://www.seek.com.au/employer/hiring-advice/3-steps-to-better-salary-conversations-with-your-staff