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Remuneration negotiation

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Luke Henningsen is the executive general manager of Chandler Macleod’s professional recruitment business across Australia and New Zealand. Luke has specialised in senior search and selection in the Australian market since the mid nineties. For more information on Chandler Macleod's services visit www.chandlermacleod.com.

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Economic drivers may help your case

It is well-documented that unemployment in Australia is tracking at its lowest rate for many years. This alone strengthens your arm when attempting to negotiate a salary increase. In a candidate-short market your employer will be acutely aware that it will be difficult to find a qualified and able replacement for pretty much any white collar professional within their workforce, and marketing is no different.

That said, the sector within which you work, or the state within which you live, may have a larger influence than you think in regard to your ability to negotiate a pay increase during 2007. Again, knowledge and preparation are the keys. If your employer is operating within a growth industry sector, and the state you’re working in is feeling the pinch of a skills shortage, your arm will be stronger.

Nationally, the demand for white collar professionals and managers remains strong across all regions and sectors. This trend is largely a result of the continued resources boom and the strong global economy. Higher interest rates and the east coast housing downturn, however, have resulted in a slower level of jobs growth (or even redundancies) in some sectors, such as retail, finance and tourism.

Statistics show that recent jobs growth within New South Wales falls a little short of all other states. Within the state of Victoria, jobs growth continues to climb steadily, particularly in sectors associated with the state’s large construction and property sectors. This is expected to grow further still as a result of the State Government’s post election spending in building and infrastructure projects across the state. Recent rises in interest rates, however, continue to contribute to a small drop in the very large Victorian retail sector.

In contrast, jobs growth within the retail sector is expected to increase in Queensland, as the state continues to develop a larger share of the national population, and economy.

Jobs growth in Western Australia is showing signs of slowing down, following the massive boom in recent years. The skills shortage is still prevalent within most sectors, however, and this will remain the case for some time to come.

In the state of South Australia, statistics now show that jobs growth is below the national average, but demand does remain strong as a result of steady economic conditions.

Negotiating a pay rise can often be an uncomfortable and embarrassing experience, even if you are extremely confident of your worth. Preparation, however, is the key to success when entering into negotiations with your boss.

Achieving a pay rise depends on a number of key factors, and not all of them are directly related to your personal performance; some are out of your control. Firstly, the performance of your company is a crucial factor. If your company is doing well, achieving targets and making a healthy profit you are, of course, more likely to be able to negotiate a pay rise than if your company is underperforming and not making a profit. Do your homework. If your company has no profit to share, then you do not need to feel insulted if your pay rise is modest, as your company may simply be unable to offer you more. If your company is having a record breaking year you know that your chances for success are higher.

Assuming your company is performing well, you feel within your heart that you have performed well and you choose to negotiate, call a meeting with your manager to discuss this in the correct forum and environment. Once a date and time is set, it is important to ensure that you negotiate from a position of strength and power. To maximise your chances of achieving a pay rise you must be able to clearly demonstrate your direct contribution to your team’s tangible output. Better still, attempt to link your output to key business issues such as: your company’s revenue stream, any cost saving initiatives and exercises that you have driven or been a part of, customer service excellence or business/departmental growth.

The key message is not to assume that your boss knows everything that you have achieved, and what you have contributed to the team and the broader business. This is a mistake that a lot of professionals make, putting in the effort all year and sitting back and waiting for their boss to reward them accordingly come salary review time. The reality is that your manager may not be aware of the contributions that you have made; so document them clearly and concisely in readiness for your meeting.

It is also important to review your job description prior to the meeting, as your job role may have changed a little over the course of the year. You may even have taken on extra responsibilities that are not reflected in your formal job description. Make a list of the extra tasks that you are doing outside of your job description and, again, link each task to a tangible outcome wherever possible, such as: revenue generation, a new business outcome, a cost saving and so on. If your job description includes key performance indicators (KPIs), assess your performance against your KPIs before the meeting.

Key to your preparation should also include arming yourself with knowledge of your worth. Talk to as many people as possible from within your industry or field of expertise, use salary surveys to add weight and tangibility to your request, look at job advertisements in the newspapers and online, and consider talking to a recruiter who will be able to review your skills and provide an honest synopsis of your worth.

Upon presenting your case, do not rush your manager into giving you a decision. More often than not your manager will need to refer your request and your case to Human Resources, and their own manager, as well as ensuring that departmental budgets have room for the level of increase that you desire.

If your company is performing well, you have prepared well, the market is right, your expectations are realistic and you have presented your case professionally, there is a high likelihood that you will succeed. If you do not receive the news that you were looking for, however, try to ensure that you have prepared a suitable contingency plan and do not overreact or say something that you will regret.

If you feel your salary is not a true reflection of your ability or market worth, and the salary increase does not bridge the gap, changing jobs may well be an option, particularly in the current candidate-short environment, but you should aim to do this on your terms and to your own timetable.

If you do not receive the pay increase that you were looking for, but you are keen to stay within your current role, an alternative could be to seek non-pay related rewards as part of your overall package, such as access to extra training, financial assistance with your further education and time off to study, parking, access to a company-funded mobile phone, contribution to your home internet bills etc.

Your strong performance over the duration of the year should always provide the platform for a salary negotiation, and your rewards should be linked to improving your work performance. So, the bottom line is to roll up your sleeves, add value to your business in any way you can and work as hard as possible to become indispensable.

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