Towards the end of the year could be the best time for finance employees to ask for a pay rise. Read more here.
- 66% of Australian CFOs planned to increase their financial top performers’ salaries and 78% plan to distribute bonuses in 2016.
- 36% of CFOs and finance directors don’t think annual performance reviews are necessary.
As 2016 draws closer to an end, now could be the best time for finance employees to ask for a pay rise, as companies are more inclined to consider pay rise requests from their employees if they have had positive EOFY results. This is according to on-the-ground research and experience from specialist recruitment consultants at Robert Half.
At the commencement of 2016, according to independent research commissioned by Robert Half, two-thirds (66%) of Australian Chief Financial Officers (CFOs) were planning to reward their financial top performers with a salary increase in 2016 and 78% of CFOs across the country planned to incentivise their employees with a bonus.
For those finance employees who did not receive a pay rise, the closing months of the year could be the best opportunity for employees to breach the subject of higher remuneration with their boss.
Andrew Morris, Director Robert Half Australia said: “Employers naturally realise the changes within the Australian economy. Whether it’s the rising cost of living or the inflated housing market, are all factors contributing to rising salaries which indicates 2016 is still an opportune time for finance employees to seek a pay rise.”
When businesses are performing well financially, employees have a higher chance of successfully asking for a pay rise. 2016 was predicted to be a positive year for finance employees as 82% of CFOs were confident about Australia’s economic prospects for the year and 86% were confident about their 2016 company’s growth prospects.
This confidence is also reflected in a steady hiring pace through to the end of the year. The latest data released by the Australian Bureau of Statistics (ABS) reveals there has been an increase of 800 roles across Financial and Insurance Services between May 2016 – August 2016, representing an overall increase of 3.6% in finance employment compared to 12 months ago.
“The majority of companies are optimistic about their growth prospects and economic optimism is also high among business leaders, another sure sign putting companies in a good position to award salary rises. At this time of year, bookkeeping, tax returns, and forward planning are high on company agendas, so for employees who haven’t received a pay rise now may be the best time to ask.”
“However, strains on the Queensland and Western Australian economies may force business leaders in these states to consider non-financial rewards as an alternative to salary increases, such as more annual leave and flexible working arrangements.”
Employees should be wary of waiting until their yearly review to discuss a higher salary with the boss, as more than one in three (36%) CFOs and finance directors no longer think annual performance reviews are necessary. This could potentially leave employees missing out on their opportunity to ask for a pay rise if they think performance reviews are their only chance.
“Many Australians still find asking for a pay rise a daunting experience. Even though many employees might feel entitled to a pay rise, not everyone will find the courage to ask for one, with a lack of confidence typically the main culprit and driver of fear. It’s vital for employees to remain confident when asking for a pay rise, as having confidence will not only impact their income, but also their career path and promotion opportunities,” Andrew Morris added.
Preparation is key – 5 steps for preparing to ask for a pay rise
1. Ensure you do your research to understand how the market is performing
Research your company’s industry – if the industry is doing well and your skill set is in high demand, these factors can be leveraged to your advantage when asking for a higher salary. However, if your company’s performance has not delivered favourable results, now may not be the right time to approach the boss for a pay rise – yet you may be able to negotiate non-financial rewards such as annual leave and flexible working arrangements.
2. Understand what value you bring to your organisation
In many organisations, salary rises are linked to performance and results (rather than seniority). Before asking for a rise you therefore need to ask yourself: “What have I done to add value to the company and how can I further improve on this performance?” Asking these questions will help justify your request for a higher salary.
3. Look at the salary surveys for your industry
Knowing what you are worth by using industry comparisons is a great start to seeking a higher remuneration, and a salary guide can be a valuable tool here. Consult the Robert Half Salary Guide to find out what your industry is paying for particular finance roles.
Using a salary guide to assess what you are currently earning compared to your peers within your industry will also help you decide if you should aim to negotiate with your employer or consider making the switch to a new company.
4. Don’t ‘ambush’ your employer
When asking for a pay rise, don’t rush the process. “Employees need to give their manager at least three or four days’ notice when asking for a meeting, effectively tabling an agenda to discuss their career and salary,” Andrew Morris added. Giving your manager time will allow you to plan what you are going to say and gives the manager time to properly evaluate staff performance.
5. Be honest and realistic with your personal assessment
When you’re trying to negotiate a pay rise, be prepared to look at things from the boss’s perspective. Can they justify a salary increase higher up the chain? Can your company afford it? What will the organisation get in return? Are you too valuable to be refused a salary increase? If you’ve already played their side of the court, you’ll be able to give yourself an honest assessment of your abilities and performance and be able to satisfy any of your boss’s concerns.
About the research
The annual study is developed by Robert Half and was conducted in December 2015 by an independent research firm, surveying 160 Chief Financial Officers (CFOs) and Finance Directors in Australia. This survey is part of the international workplace survey, a questionnaire about job trends, talent management and trends in the workplace.