Pay rise strategies for 2009

Kate Southam, Editor

Ask Kate Column

With all the talk about redundancies and the fact economic recovery will take many more months, Ask Kate readers are confused as to whether they can expect, or should ask for, a pay rise.

Let’s look at the issue step-by-step.

When do companies award pay rises?

While some companies award pay rises on the anniversary of an employee’s start date and some use a calendar year system, many employers in Australia follow the financial year – July 1 to June 30.

That means salary budgets are finalised by May and performance reviews and pay reviews are carried out in June. Some companies directly link performance reviews and pay reviews and some companies don’t.

Employees usually find out if they got a pay rise in early July.

What is the current climate on pay?

I don’t have a crystal ball but I don’t think I need one to predict that employers are going to be tight with the dollars this year.

Keep in mind that many companies have gone to huge lengths to minimise redundancies and so might view any upward pressure on salaries as a threat to jobs.

On the other hand, with fewer people doing more work, there could very well be a solid case for giving staff members even modest pay rises to ensure they feel valued.

From the Ask Kate emails I’ve received it appears many people still expect a pay rise. I also saw a Randstad 2009 Employment Trends Report in early May that found while only 21 per cent of companies surveyed were gearing up for pay rises, 78 per cent of the employees quizzed expected a pay rise. CareerOne is now doing its own survey on this topic so please take part.

What do employers base a pay rise on?

A pay rise is usually based on how well your employer has performed and then how well your team has performed and then you over the last year. Pay rises are also awarded to those who have been promoted or have taken on significantly more work. A smart employer will also recognise those employees who can demonstrate how they have contributed to revenue, the retention of a client, new innovations, cost saving efficiencies and the quality of the products and or services the employer produces.

Doing a good job in the role you have is what you are paid to do so may not merit a pay rise or just a modest cost of living (CPI) increase. From March quarter 2008 to March quarter 2009 CPI rose by 2.5 per cent.

How do I get a pay rise?

First, Benchmark your current rate of pay

You need to research rates of pay for your industry and role. Use the Salary & Benefits on the CareerOne website to do this. Go to our home page and click on the News & Advice tab and then Salary Centre or use the links here.

You will links to salary surveys and articles about salary and wages trends.

Next step is to establish your employer’s pay rise process. You might just have to be upfront and ask the boss or HR if your employer runs to a financial year calendar or anniversary system.

For employers who use the financial year, management reviews its budgets and people in June and you find out in early July so don’t dawdle. Start working on your pay rise pitch now.

The squeaky wheel gets the oil so let the boss know soon that you want to make a pitch for a pay rise. Email this or mention it in person but stress that you will send a document supporting your pitch. You do not want an answer on the spot. You want to give the boss time to think through what you have put forward so you can then sit down and discuss it.

I hear many people say, ‘my boss knows what I do, why should I have to tell him/her?” The answer is because you want a pay rise. Don’t whine or threaten. Just make a well considered case.

How do I rate myself?

Take a non-emotional look at all the things you are doing and how well you have performed your job. If you have a job description, look at it. Most of us have no idea where we put our “PDs” – position descriptions.

Have you acted up in a role? Taken on more work? When X person left and was not replaced, did you take on the extra duties? Did you help to bring in new business or keep a client from walking? A huge range of roles contribute to client service, revenue and the efficient running of the company so don’t assume pay rises are for other people who directly generate revenue.

Also, review any added qualifications or training you have undergone that relates to your job.

With the number of redundancies a lot of people have taken on more responsibility or even more than one role. It’s very important that you document this in writing.

Your boss may have to make a case for your pay rise to his or her boss so if you do the work for your manager, you make their life easier and increase your chances of success.

Following up and interpreting the news

A few days after emailing your document, follow up if the boss has not made a time to talk. When you do talk, stay calm.

If your boss gives a flat no without explanation, start job hunting. If you get a ‘no’ because of the company’s financial position, keep an eye on the job market and also try to get a commitment for an interim pay review rather than wait another year. If you get a pay rise but it is small and you know that the reason is either your performance or that of the company, then don’t feel you have to look for a new role if you enjoy the one you have.

Also, have some non-financial rewards up your sleeve to ask for so you don’t walk away empty handed and resentful. Time off is probably the big one. A doona day a year or an annual day off to volunteer or flexible work hours might work.

Internal or external training are rewards too. Just remember, when researching courses and training, ensure you can relate it back to doing your job better. There needs to be a benefit to the business of you doing a course. Ask the company to pay for the course, or pay half and to give you study leave.

If you want to go early on a Wednesday to make a yoga class and instead work earlier on a Friday or some other day, be ready to outline the plan. Whatever you do, don’t get to the end of a pay review that is going nowhere and suddenly say, ‘well, what non-monetary rewards you can give me?’

The important thing is that you do the ground work so you can present a plan the boss can say ‘yes’ to. Bosses like solutions, not problems.

Good luck