Are you in line for a pay rise this year?

The short answer is, yes, you’re probably in line for a pay rise this year. The bad news is that, on average, it isn’t likely to be as much as you’d like.

Hays Salary Guide FY25/26 has found that employers are unlikely to meet the expectations of their employees when it comes to salary increases in the coming 12 months.

The report shows that 84 per cent of employers plan to offer pay rises at an average of 3.7% in the year ahead. This is an increase on the 80 per cent who offered increases in the last 12 months, although they did so at a higher average of 5 per cent. The lower average may not be enough to meet employee expectations, with those surveyed expecting an average increase of 6 per cent over the coming year.

Employers and employees not aligned expectations

Digging deeper into those averages, the biggest discrepancy occurs right in the middle of the salary bands, where a large proportion of employees expecting to get 5-10% increases, are more likely to get 2.5-5% increases.

There is of course the chance that you won’t get a pay rise – 16 per cent of hirers say their organisation won’t be increasing pay. But this is still below the 19 per cent of employees who don’t expect an increase, and so a small percentage will be pleasantly supplied.

Not surprisingly as pay rise bands increase the gap in expectations starts to widen. At the very top, there are 5 per cent of employees expecting an increase of more than 20 per cent, but only 2 per cent of organisations expect to give that. Another 6 per cent of workers expect an increase of between 15 and 20 percent, but no employers expect to give that amount. And then one in 10 employees expect to get between 10 and 15 per cent, but only 2 per cent of organisations are planning to give that.

Virtually half of employers (49%) are planning to give between 2.5 and 5 per cent, compared to the 27 per cent who expect that. While 22 per cent of employers will give 2.5 per cent or less, which compares to the 15 per cent of employees who expect that.

Will I receive a pay rise in my next review?

To see if your skills are in line for a salary increase this year, visit our online Salary Checker to view the highest, typical, and lowest salaries for your job.

How much should my salary increase each year Australia

Annual wage growth across the board in Australia averages out at three per cent, but what a reasonable pay rise looks like differs by industry. Some industries grow at a faster rate than others, with Australian employers also basing salary increases on other factors such as company policies, as well as your specific job role and performance. With employers looking to offer an average of 3 per cent, it is only just nudging ahead of inflation.

Experience of recent years drive up employee expectations

The last few years that have seen incredible change in how people work, their flexibility and adaptability, combined with skills shortages, has changed how employees feel when it comes to salary increasess.

Back in 2019, 67 per cent of employees expected a pay rise less than 3 per cent, that has now flipped to a point where in the Hays Salary Guide FY25/26 66 per cent expect a raise greater than 3 per cent.

Design the employee experience

To bridge the expectation divide, employers and professionals should look beyond just the numbers and consider the entire employee experience being offered.

While employers recognise the importance a competitive remuneration offering, professionals are seeking more than just financial compensation. The benefits on offer, the company culture and the wider organisation’s values and purpose also drive decisions on who to work with and for.

Employers are prioritising benefits that help them build a skilled and capable workforce to improve productivity, customer satisfaction and profits. Flexibility was by far the biggest benefit that employees were looking for in the latest salary guide survey and employers would do well to take notice of this. For many, time does equal money.

If all else fails, consider your options

Of the skilled professionals we surveyed, two thirds are currently looking or planning to look for a new job in the next 12 months.

For professionals with skills in demand, the time may be right to consider an external move to speed up your progression. If you are considering your options, we invite you to share or update your CV so we can bring opportunities to you directly.

Look for benefits beyond just salary

There are several benefits you can seek that are of tangible monetary value or allow you to save on personal costs.

Performance bonuses

Employers can offer performance-based bonuses that are tied to achieving specific goals, targets, or milestones. These bonuses can be an effective way to reward and motivate employees based on their individual or team performance.

Flexible working arrangements

Greater flexibility in working hours or the option to work remotely helps employees save on commuting costs, reduce stress, and achieve a better work-life balance, which indirectly compensates for the impact of inflation. This is the number one benefit that employees are currently seeking.

Additional perks and benefits

Employers can enhance their employee benefit packages with non-monetary perks. These can include increased paid time off, improved healthcare coverage, gym memberships, wellness programs, childcare support, and educational assistance.

Download Hays Salary Guide FY25/26