Pay excuses and current salary trends
There is a lot of talk about salaries right now.
The Prime Minister, Kevin Rudd, is leading the charge with a pay freeze for MPs and a call for Australia's top executives to sacrifice their hefty pay rises this year in the name of fighting inflation.
Not surprisingly top companies recently contacted by The Daily Telegraph indicated that when it came to the top brass, they would be ignoring the PM's suggestion but what about you?
Peter Wilson AM, who is the national president of the Australian Human Resources Institute, confirmed that behind closed doors, salaries are a hot topic in budget meetings.
Companies that run to a financial year - July 1 to June 30 - are working on their budgets now and that includes their salary budgets. Mr Wilson said rising interest rates, the increased cost of international finance and the ailing US economy would be causing bottom line woes for some employers but not all.
He said the Australian economy remained strong - especially off the back of resource buying by China - so for companies not highly leveraged or dependent on the US salaries may not be a crucial issue.
Whatever the case, Mr Wilson advised employers to reward their "top performers" so they don't walk out the door.
"When I say top performers I am not necessarily talking about the heads of divisions but the people who are critical to running your business," Mr Wilson said.
"That could be the person running the warehouse or the PAs or the receptionist. Employers need to have the courage to do that," he said.
Mr Wilson also advised employers to use good communication to manage employee expectations.
"The old ostrich approach is a losing strategy," he said.
Employers needed to clearly explain specific events or issues impacting their bottom line before they outline what that meant for their employees. He said good people were "hot" and could react with their feet if the salary process was not managed well.
I would add that we all read the news and as well as knowing what is going on overseas we also know that our basic costs - rent, credit, petrol, food - are going up and that we need to cover those costs.
Companies running to a financial year usually hold performance reviews in May or June and pass on salary increases around July 1. Some companies review salary on an employee's anniversary and some run to a calendar year.
Generally, salary increases range between 0 to 5 per cent. Employees on bonus schemes or who receive internal promotions get more but it's a sad fact that if you want to leap ahead salary wise you often have to change jobs.
The cost of living indicator, the Consumer Price Index (CPI), rose 3 per cent for the December quarter. Figures for our current quarter will not be available until April but let's imagine it was 3 per cent. That would mean that if your pay rise was not at least 3 per cent then you are going backwards. However, a 5 per cent increase is usually reserved for those who do a fantastic job, so 3 per cent is still considered quite generous. But where does that leave most people?
In addition, one of my recruiter contacts told me that the Labour Price Index is actually a more accurate measure of where salaries are at. The latest data showed average wage increases running at 4.2 per cent.
You better start documenting all those great things you have been doing above and beyond what you get paid to do. You won't be asked to produce this "evidence" until May or June but don't leave it until then to start building your case for a pay rise.
Read more:
How to pitch for a pay rise
The Prime Minister, Kevin Rudd, is leading the charge with a pay freeze for MPs and a call for Australia's top executives to sacrifice their hefty pay rises this year in the name of fighting inflation.
Not surprisingly top companies recently contacted by The Daily Telegraph indicated that when it came to the top brass, they would be ignoring the PM's suggestion but what about you?
Peter Wilson AM, who is the national president of the Australian Human Resources Institute, confirmed that behind closed doors, salaries are a hot topic in budget meetings.
Companies that run to a financial year - July 1 to June 30 - are working on their budgets now and that includes their salary budgets. Mr Wilson said rising interest rates, the increased cost of international finance and the ailing US economy would be causing bottom line woes for some employers but not all.
He said the Australian economy remained strong - especially off the back of resource buying by China - so for companies not highly leveraged or dependent on the US salaries may not be a crucial issue.
Whatever the case, Mr Wilson advised employers to reward their "top performers" so they don't walk out the door.
"When I say top performers I am not necessarily talking about the heads of divisions but the people who are critical to running your business," Mr Wilson said.
"That could be the person running the warehouse or the PAs or the receptionist. Employers need to have the courage to do that," he said.
Mr Wilson also advised employers to use good communication to manage employee expectations.
"The old ostrich approach is a losing strategy," he said.
Employers needed to clearly explain specific events or issues impacting their bottom line before they outline what that meant for their employees. He said good people were "hot" and could react with their feet if the salary process was not managed well.
I would add that we all read the news and as well as knowing what is going on overseas we also know that our basic costs - rent, credit, petrol, food - are going up and that we need to cover those costs.
Companies running to a financial year usually hold performance reviews in May or June and pass on salary increases around July 1. Some companies review salary on an employee's anniversary and some run to a calendar year.
Generally, salary increases range between 0 to 5 per cent. Employees on bonus schemes or who receive internal promotions get more but it's a sad fact that if you want to leap ahead salary wise you often have to change jobs.
The cost of living indicator, the Consumer Price Index (CPI), rose 3 per cent for the December quarter. Figures for our current quarter will not be available until April but let's imagine it was 3 per cent. That would mean that if your pay rise was not at least 3 per cent then you are going backwards. However, a 5 per cent increase is usually reserved for those who do a fantastic job, so 3 per cent is still considered quite generous. But where does that leave most people?
In addition, one of my recruiter contacts told me that the Labour Price Index is actually a more accurate measure of where salaries are at. The latest data showed average wage increases running at 4.2 per cent.
You better start documenting all those great things you have been doing above and beyond what you get paid to do. You won't be asked to produce this "evidence" until May or June but don't leave it until then to start building your case for a pay rise.
Read more:
How to pitch for a pay rise
