If you’re wondering why you haven’t received a pay rise recently, don’t stress: turns out it might not be you that’s the problem.
According to the Australian Bureau of Statistics, wages grew just 0.6 per cent in the June quarter, bringing annual growth to 2.3 per cent.
That’s the slowest growth rate in the history of the data, which started in September 1998. Ouch.
If you’re in financial services, you might be doing okay, with the industry recording the highest pay increase of 2.8 per cent. After that, education and training salaries were up 2.7 per cent, followed by manufacturing and healthcare and social assistance, both up 2.6 per cent.
Those industries with slowest annual wage growth were professional, scientific and technical services and construction, both up 1.7 per cent.
“Wage growth is barely keeping ahead of prices,” says CommSec economist Savanth Sebastian. “But in essence, the subdued wage outcomes are the right outcome in a patchy economic environment – businesses are getting access to good quality labour at a decent price, and not putting undue pressure on profitability.”
He says it’s not all bad though. “Fortunately high share and home prices are lifting wealth levels and will continue to support spending. In addition, the cuts to mortgage rates over the past couple of years will help to alleviate pressures on the household budget.”
If your wallet isn’t fattening with the share and property markets, you’re going to need to plug on and get serious about rinsing some more bucks out of your boss. And that all comes down to the art of negotiation.
However Matt Lohmeyer, principal at Negotiation Partners and one of Australia’s top negotiators, told The Hip Pocket that it’s not just about the money.
“The moment you talk about negotiating a pay rise, you’re locking yourself in to negotiating dollars. Think of it as negotiating your terms and conditions.
“Work out exactly what would add some value for you. What else can your employer give you? Childcare, salary sacrifice, a new car, whatever it might be.”
The key, Lohmeyer says, lies in preparation.
“Start early. Engage with your manager, and find out what they need. What are their KPIs? What can you do to help them deliver those KPIs?”
And if you get a “no” in return?
“No is never the answer. It’s just the beginning. When your boss says no to you, try and understand the reason behind the no. Is it a budget thing, is it a lack of performance in the past? Are there ways to address that?
“Ask them, ‘what would I need to do for you, for you to be comfortable with giving me x, y, or z?’”
Then, once you’ve got them in that sweet spot, it’s time to squeeze.