How to get a pay rise to support the cost of living crisis

The average Australian will agree that the cost of living crisis isn’t getting any better. With workers feeling the pinch of increased housing prices, sky-high utility bills, childcare costs, and expensive groceries, there has never been a more important time to increase your salary and stay ahead of these rising prices.

How much income do you really need?

The ABS estimates that the median employee earns $1,396 per week from their main job. But after you account for the average household expenses, including housing, utilities, groceries, education costs, insurance, and healthcare, there’s not much left over for saving, investing, or paying off debt (and three in four Australian households have debt). 

Yet, to get ahead and have financial security, you need to save and invest regularly. Therefore, your options are either to:

• Decrease your expenses, or
• Increase your earnings.

There are already some great resources out there that focus on how to decrease your expenses. (If you don’t know where to start, we recommend checking out the Moneysmart website, budgeting books from your local library, financial podcasts, or the National Debt Helpline.) So in this article, we’ll focus on practical ways you can increase your earnings, starting with getting a promotion.

1. How to get a promotion

One of the best ways to increase your salary is to secure a promotion with the business you’re already employed in. You know the company, the people, and the history. You’ve dedicated time to grow and support the business, and you can use this to help you advance your career. 

Four ways to get a promotion:

• Ask for it! Performance reviews are a great time to discuss your role and a potential move upward (especially when you have some good statistics and metrics to share). However, if you work for a company that has irregular performance reviews, or you don’t want to wait, schedule a meeting with your manager. Take note of any achievements you’ve made in your current role and where you’ve been taking on more responsibility. Use this information to have an open discussion about your future in the company.
• Be an engaged employee in the workplace. Put your best foot forward. Contribute to discussions, volunteer to work on other projects, or help team members with their work when they’re swamped and need a hand. These ‘extra mile’ actions add weight to your argument that an expanded role is required in your team.
• Build a strong educational foundation. Even if you didn’t start with a formal qualification, it’s never too late to get one. You can add to your knowledge through professional development opportunities or diploma qualifications. Showing a commitment to ongoing learning demonstrates to your manager that you’re serious about your role and industry by staying up-to-date in the modern workplace.
• Demonstrate leadership. Even if you’re not currently in a leadership role, show your managers that you’re capable of leading by demonstrating those qualities in the workplace. Search for opportunities to improve and streamline business processes, put your hand up if asked to lead a team, help out newer team members, or start an office initiative like a charity event or recycling program.

2. How to secure a pay rise

While receiving a promotion is a great way to achieve your salary goals, it’s not the only way. If you’ve been working hard in your role and demonstrating value to the company, it may be time to ask for a pay rise in your current role. So, what can you do to increase your chance of getting a pay rise?

• Research current market trends of salaries in your industry. This helps you become more prepared for a pay rise conversation with your manager. Some good places to start are corporate salary guides like Hays and Michael Page, and websites like Glassdoor, SEEK, and PayScale. If you work under a particular award or are part of a professional membership, these can also offer valuable insights.
• Note down your achievements made in your current role. The more specific, the better! It’s hard to argue with solid data and numbers, and this is a great way to show how you’ve grown and contributed to the business. You can also highlight any soft skills you’ve developed – collaborating with stakeholders on a tricky project, mentoring a new starter, championing a corporate initiative. Also mention any new certifications you’ve gained or skills you’ve demonstrably honed.
• Be proactive in your role by taking on new projects, or taking on extra responsibility. This shows you can take initiative and reiterates the value you provide in your current role.
• Schedule a meeting and just ask.  If you set dedicated time aside to talk to your manager and commit to having a career growth conversation, you’re already that much closer to securing a pay rise. And remember: if you ask, and they say no, that doesn’t have to be the end of the conversation. Ask them what skills you’d need to demonstrate or milestones you’d need to achieve to secure a pay rise. That way, you have a clear pathway to success.

Following these steps and taking time to research and prepare before asking for a pay rise shows that you’re committed to providing value to the company. You’re also allowing yourself to step into the conversation with more confidence. This can help you feel less nervous when approaching this topic with your manager. 

How To Have a Career Growth Conversation With Your Boss

But what if you’ve pursued a pay rise or promotion within your current company, and it’s not going anywhere. Or you’re burned out, bored, or looking for a change. What else can you do to secure more earnings?

3. How to make a career change

If you’ve done your research and still struggle to see opportunities for growth in your current position or career, it may be time to broaden the search. Changing your career can be a great way to increase your earning potential and find sustainable career growth. This is especially the case within the healthcare, construction, logistics, and technology industries in Australia. 

[TIP: According to SEEK, those who changed roles had a x1.6 greater salary increase than those who stayed in the same job. ]

So, how can you increase your chance at a successful career change? 

Thinking about changing careers or switching industries is no small task, and starting something new can be daunting. One way to stand out when applying for new roles is to back yourself by building your skills. Solidifying your existing skills, or committing to upskilling with formal training, can inject confidence into your work and help you reach your career goals. The investment in your education is often worth it for a higher earning potential.

Another way is by learning to ‘talk the talk’. Even without specific industry skills for a new role, you may find that many of the skills you already have can translate across different industries. Remembering your skills and workplace experience can help build your confidence and allow you to showcase your best strengths as you apply for new roles. 

4. How to start your own business

Being your own boss is a goal for a lot of people. Having full autonomy over your business and role is an attractive prospect. Plus, your earning potential isn’t capped. You get out of the business what you’re willing to put into it – and this includes your income. Consider if your experience may lend itself to starting a business, or if you want to branch out into a new interest through upskilling with formal training.

Do I need a qualification to start a business?

Perhaps you already have a great business idea, you could pursue a new interest, or you could start freelancing using your existing skills? You can take this idea or skill and grow it to fit your needs. This can look different for everyone, but here are a few avenues to consider when starting a business.

Start a new business: This could be doing what you currently do, or taking a leap and trying something new.  As your business grows, you could turn this into your main income stream.

Become a freelancer: You can work when it suits you, design your own schedule, and work with the clients you want to, all while using the skills you already have. This is a great example of something you can scale to suit your needs. 

Start a side hustle: Maybe you already have a hobby in mind, or you could pursue a new interest. A side hustle is a great way to support your income with as much commitment as you can manage. We recommend checking out ‘Side Hustle’ by Chris Guillebeau as a great place to start if you want to learn more!

Either way, taking the leap and starting your own business will not only provide new opportunities, but also put a few more dollars in the bank. You’d be surprised what you can achieve when you commit to starting.

How to choose the right way to increase your salary

Increasing your salary is one of the easiest ways to reduce financial stress and provide long-term solutions to your money goals. Remember to look at your current workplace first, as it’s often the easiest way to secure a pay rise. Consider formalising or furthering your skills to help you achieve your career goals and secure that dream job. Finally, be flexible and creative as you search for opportunities to elevate your financial situation.

Whether you ask for a raise or a promotion, change careers or start your own business, there is no wrong path to choose. Only the one that works best for you and your lifestyle. 

Resources

• https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/employee-earnings/aug-2024 
• https://moneysmart.gov.au/budgeting/manage-the-cost-of-living
• https://ndh.org.au/ 
• https://www.seek.com.au/career-advice/article/fastest-growing-salaries