27 September 2023

How to negotiate a pay rise

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Dr Niki Vincent* discusses how women can secure pay rises to get even on rising inflation and the gender pay gap.

Interest rates. Petrol. Power bills. Health insurance. Milk. Potatoes. And of course, lettuce.

The list of products and services with surging prices grows by the day.

There’s unlikely to be a single worker out there who is not thinking about asking the boss for a pay increase to address this growing gap between rising prices and wages.

Women face another issue, the gender pay gap.

It currently stands at 22.8 per cent for total remuneration.

That means that on average, men earn over $25,000 a year more than women – and this gap increases with age.

An Australian woman aged 45 to 65 earns on average $40,000 a year less than an average man.

The gender pay gap is not simply due to women working part time or taking parental leave.

The latest research from KPMG’s “She’s Price(d)less” report found that gender discrimination remains the leading driver of the pay gap.

This discrimination is not always deliberate.

Just like our assumption that women (in heterosexual relationships) will always be the one to take time out of their career to raise children.

Unconscious bias can influence our decisions without us being aware of them – including how frequently bosses grant women pay rises and by how much.

For a long time there was a view that women don’t ask for pay rises as often as men do, but that has been debunked by recent studies which found while women ask just as often as men for pay rises, women are less likely to get what they ask for.

An overseas study this year found women who asked, obtained a raise 15 per cent of the time, while men obtained a pay increase 20 per cent of the time.

While that may sound like a modest difference, over a lifetime it really adds up.

The median superannuation balance for men aged 60-64 is $204,107, whereas for women in the same age group it is $146,900, a gap of 28 per cent.

Of course, the onus should not be on women to ask for pay rises.

Performance should be rewarded, regardless of gender.

But right now, it often doesn’t work that way and, based on current trends it’s predicted it will take another 26 years for the full-time total remuneration gender pay gap to close in Australia.

So through gritted teeth, I say while women have every reason to be angry about this situation, it’s also time to get even, especially given the current cost of living crisis is looking like it could get worse.

Based on my 22-plus years in senior leadership positions, here is my guide to help women negotiate a pay rise.

COME with a good business case as to why you deserve a pay rise.

This should be based on your performance at work, not the “additional mouth to feed justification used by men in the past when their wife was having another child.

Provide evidence to back your case and link the request to your actual performance and future plans in the organisation.

ASK your manager what the average salary for your role/level is if you’re not sure how much you should be negotiating for.

(If they don’t know the answer, this could even prompt them to consider conducting a gender pay audit, which will identify if there is a pay gap at an organisation level.)

There are also ways to do your own homework on benchmarking your salary – several of the major recruiting companies put out annual salary guides across a wide range of industries and occupations/professions.

You can find these online.

PRACTICE before you have the conversation – especially if you don’t feel confident negotiating.

I have no problem negotiating hard on behalf of others but negotiating for my own benefit always makes me a bit uncomfortable, so I always make sure I am well-prepared and have practiced what I plan to say ahead of time.

With all this said, sadly, there is evidence showing that women are penalised for trying to negotiate a pay rise.

Men can certainly overplay their hand and alienate negotiating counterparts.

However, in repeated studies, the social cost of negotiating for higher pay has been found to be greater for women than it is for men.

This is why it’s vital for organisations to level the playing field for women.

The Victorian Government has taken an important step to achieving this through legislating the Gender Equality Act and establishing Australia’s first Commission for Gender Equality in the Public Sector.

We will soon be revealing the results of Victoria’s first audit of public sector organisations – which combined, represent one of the largest employers in Australia.

Among other areas, this audit will bring to light gender pay gaps at an organisation and sector-wide level.

This transparency is important, because women in particular often consider that talking about pay is indiscreet – because we are taught not to talk about it.

Unfortunately, this allows pay inequity to continue.

It’s not about knowing exactly how much the person on the other side of the partition is earning, but ensuring you are both being paid fairly, based on your skills and experience, and not your gender, working pattern, or parenting or caring status.

*Dr Niki Vincent is the Commissioner for Gender Equality in the Victorian Public Sector.

This article first appeared at womensagenda.com.au.

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