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.

Skills shortage drives up employee expectations

The skills shortage has made 64 per cent of professionals more confident to ask for a pay rise. In fact, many have already benefited from the demand for their skills through a salary increase (30 per cent), new job (13 per cent) or both (19 per cent).

Despite the increased salary boost employers intend to offer, employee expectations continue to not be met. Today 91 per cent of professionals believe their performance and the demand for their skills merits an increase greater than three per cent.

In fact, an uncompetitive salary is the top factor motivating new job searches this year (48 per cent), ahead of the rising cost of living (46 per cent), a lack of promotional opportunities (42 per cent) and a poor management style or workplace culture (38 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. Training, ongoing learning and development and career progression opportunities are the top three benefits they provide.

While employees do look for benefits that support their skills and career growth, they also value those that support their work-life balance. For instance, training is the top benefit that employees look for, while career progression is valued by 60 per cent and more than 20 days’ annual leave is sought by 58 per cent. Rounding out the top five are ongoing learning and development (46 per cent) and wellbeing leave (30 per cent).

If your salary increase fails to live up to expectations, consider whether additional emotional salary benefits can bridge the divide.

If all else fails, consider your options 

Of the skilled professionals we surveyed, 18 per cent will actively seek a new job this financial year, with another 37 per cent open to opportunities. Many of these professionals have upskilled to improve their job search prospects. Over the past year, 58 per cent developed new technical skills, 46 per cent soft skills and 34 per cent digital skills. Over one-quarter (29 per cent) gained higher or additional qualifications.

In some organisations, demand for skills to fuel growth has never been higher. 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. 

Incentives employers can offer when regular pay rises can't keep up with inflation

The first prize for rewarding employee performance is to simply offer wage growth that keeps up with the cost of living inflation, especially with the tight labour market making talent difficult to replace. However, sometimes a pay increase like that isn't reasonable when considering the performance of the business as a whole.

When this happens, there are a few steps employers can take to continue being a competitive option in the industry:

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.

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 the Hays Salary Guide

Our annual Hays Salary Guide  is based on a survey of over 6,900 organisations and more than 7,300 skilled professionals. Download your copy to access typical salaries and insights relevant to your job and career path. 

About this author

Nick Deligiannis, Managing Director, began working at Hays in 1993 and since then he has held a variety of consulting and management roles across the business. In 2004 he was appointed to the Hays Board of Directors. He was made Managing Director of Australia and New Zealand in 2012.

Prior to joining Hays, he had a background in human resource management and marketing, and has formal qualifications in Psychology.

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