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Negotiating Salary In The New Financial Year

Negotiating Salary In The New Financial Year

22 days ago By Emily Harris
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As the End Of the Financial Year (EOFY) looms, many of us cast our minds to salary. EOFY signifies the time businesses need to complete bookkeeping, tax returns and plan and establish budgets for the new financial year. Traditionally it also becomes the time for many businesses to inform their employees on salary and whether or not they will be receiving a pay rise in the new financial year.​ In fact, according to a SEEK survey of over 4,800 professionals, 31% said that the end of financial year – specifically July – was the magic month for pay rises[1] (Sheedy, 2019). Indeed in our research within our database of over 55,000 uniquely identified construction professionals, 70% of respondents are expecting a pay rise for the new financial year (2022 – 2023). Out of this proportion, a significant majority are expecting a pay rise of over 10% or more.

But what happens when the pay rise isn’t as big as you were expecting? Can you confront your employer about your salary package – especially at this time? And how can you do this successfully without burning any bridges? We explore these issues in today’s blog and even suggest some alternate things you can negotiate on if your organisation has reached the upper limit to their annual pay rise budget. Read below:

Before gearing up for any negotiations with your direct report or manager, it’s important to clarify two things first:

What was the context surrounding their decision? 

First thing’s first, it’s important to consider the context/rationale behind your recent salary review/update. Was the low (or no) salary increase a company-wide issue? Were any statements issued by your organisation explaining why pay rises would be minimal across the board? Or have you received a promotion already in the last six months where you received a significant pay rise? These additional factors will impact the likelihood of you receiving a pay rise for the new financial year – and especially in the case of an organisation not giving out pay rises across the board- outside of your control. Many organisations have experienced financial stress over the last two years, as a flow-on effect of the pandemic and sadly may not have the budget to award salary increases this year. Checking to see if minimal salary increases impacted the entire company isn’t to absolve you of trying to improve, but it can indicate if the organisation is in financial trouble. You want to focus your efforts on the right problem, so if it’s a company-wide issue, perhaps you should focus your efforts on securing a role at a stronger, more stable organisation rather than on negotiating your current salary[2] (Ceniza-Levine & Hedges, 2012). 

Consider your own performance over the last financial year

 Another key step before commencing any negotiations is to pause, review and reflect on the contribution you have made over the last financial year. This task requires honesty – you have to ask yourself “Do I deserve a pay rise?” 

 To help answer that question, go over all your recent feedback and performance reviews you’ve received from your manager or team leader and the KPIs you were set this year. Have you been able to meet or exceed each KPI? Did you receive positive feedback from your reviews or did you receive constructive feedback concerning particular aspects of your performance? If you feel you have achieved all the objectives set out for you within your position and have received consistently positive feedback, it’s understandable to be disappointed and you’re in a good position to start negotiations around a pay rise. If however, there is room for improvement regarding a few of your KPIs it might be worthwhile meeting with your manager to discuss what they recommend or suggest you work on, to improve your performance and be in the running to receive a pay rise/promotion in the future. 

Salary negotiations 

If you’ve contemplated the above and still think salary negotiations are worth pursuing, the following steps can help you tackle the conversation in a respectful way, ease any nerves you might have about raising the issue and ultimately help shape your case for a successful result: 

Do Your Homework

In a recent Design and Build survey on salary negotiations, the majority of respondents (26%) cited not knowing their worth as the biggest challenge when approaching negotiations. Salaries range greatly depending on industry, experience, and location, so it can be difficult to know if your salary is consistently aligning with your career progression. No matter if you’re actively job hunting or preparing for a performance review, knowing how your current or proposed salary compares to the market rate is integral to the negotiation process; it sets a benchmark that can then guide your decision on whether to accept a figure or make a counter-offer.

Researching salary rates can seem like an overwhelming process, but there are numerous organisations and online tools that can help. Australia’s leading online employment marketplace SEEK, suggests the best place to start is looking at different job postings for similar roles in your area so you can establish a ballpark salary range[3] (SEEK, 2020). 

There are even online platforms and bodies which can help calculate your worth. Global job site Glassdoor, for example, has a ‘Know Your Worth’ tool which can provide a personalised estimated market value based on their available and previous job listings within your industry. Alternately, compensation software and data company PayScale, has developed a Salary Survey that employees can use to determine a customised salary report.

Prepare your business case

When asking for a salary increase the inevitable question from employers will be, why? Why do you deserve a pay rise? Having a list of examples prepared that demonstrate how a business will benefit from your skills and experience, will help justify your request. Try and make your examples quantifiable to further illustrate the value of your potential contributions. For example, the graphic design skills and video editing knowledge you provide, save the company $xxx in outsourcing to a marketing agency. Before having this conversation, you should also gather the positive management feedback you’ve received, testimonials from happy customers or clients that you’ve worked with and measure results from projects you have worked on. Anything that will help your case and provide tangible proof that you deserve more money.

Preparing examples ahead of time will also help with your confidence levels going into the conversation and being able to justify every additional dollar you’re asking for will reassure you that your demands are reasonable and present a more persuasive case to the company.

Remain Professional

Research indicates that you won’t be refused a higher salary for simply asking the question. However, you will if you don’t ask in the right way. It’s important that you request a salary range, rather than an exact figure and that this range is consistent with the market trends. Doing this demonstrates that you’ve done your research but that you don’t want to be unreasonable. Furthermore, you want to be confident and enthusiastic when discussing your request but like with any work conversation you must remain professional and polite. Remember that negotiations should result in both parties feeling like they’ve achieved or gained something, so try and convey your goal for a win-win solution in your tone and demeanour (Buj, 2013) [4]. Ultimately, you want your employer to feel as comfortable with the final arrangement as you do so you can maintain a strong and positive working relationship.

Practice

Before raising the topic of salary, practice the conversation and your business examples with a trusted colleague or mentor – ideally someone that’s familiar with the industry or the particular company. The more you practice, the more comfortable you will feel and talking to someone who’s had a similar experience can help you prepare for the unexpected and make a stronger case.

What if there’s no room for negotiations?

If a pay rise isn’t possible, particularly over the next financial year, you should consider other non-financial benefits that you can benefit from – in terms of things like work-life balance and career progression. Over the last eighteen months, flexible working has become a key focus. While not all jobs within the Built Environment Industry 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. Consider if any of these options would be beneficial for you and if your organisation would be in a position to offer these options. It can be worth writing down a list of all the non-financial benefits you’d be interested in before going into any negotiations, so you have something to bring to the table if a salary increase isn’t a possibility. At least this way, you can then walk away from the conversation gaining something. 

Common examples of non-financial benefits:

  • Professional Development

  • Upskilling

  • Career Progression/Opportunities 

  • Additional Annual Leave

  • Greater Workplace Flexibility 

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If you’re met with resistance during your negotiations, it could also be worth considering how important this salary increase is to your lifestyle and wellbeing. Should you look for another role or is having job security more important? Regardless of what you decide, it never hurts to keep up to date on comparable roles within the marketplace and their salary offering. While doing this, you can also focus on making yourself as marketable as possible. Things like partaking in additional training, industry activities and mentoring and volunteering opportunities ensures that you’re better prepared for any future roles that catch your eye, or for presenting your sales pitch when you have your next performance review.

If you’re interested in finding out more about your salary expectations and how they compare to the current market trends, especially within the Built Environment Industry, reach out to our team of consultants for a confidential chat. You can contact us at: info@designandbuild.com.au

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

[2] Ceniza- Levine & Hedges. (2012). What To Do If Your Disappointed By Your Year-End Performance Review, Bonus or Raise. Forbes. Retrieved from: https://www.forbes.com/sites/work-in-progress/2012/12/18/3-actions-to-take-after-a-disappointing-performance-review-bonus-or-raise/?sh=6264908e16cf

[3] Seek. (2020). Salary Sorted: 5 Tips For Pitching A Higher Salary. Seek Careers – Australia. Retrieved from: https://www.seek.com.au/career-advice/article/pitch-perfect-get-your-salary-sorted-with-our-guide

[4] Buj. (2013). A Recruiter's Guide To Negotiating A Higher Salary. Insider. Retrieved from: https://www.businessinsider.com/a-recruiters-guide-to-negotiating-a-higher-salary-2013-11?IR=T