Having “the talk”

compensation scheme, pay issues

Your employees want more money, will work harder for it … but don’t know how to ask.

According to new survey findings from the Employsure State of Work Report, a whopping 70 per cent of working Aussies are not comfortable or aren’t sure how to ask their boss for a pay rise, yet their perceptions about how much they are worth might be impacting productivity.

It’s no surprise that almost half of respondents expressed they would work harder if they were paid more. However, for many of us, asking for more money feels scary and unnatural. Your best bet for success is to demonstrate how you have consistently gone above and beyond meeting your manager’s expectations.

On the other side, pay rise conversations can often be a complicated and delicate process for managers and employers. Some employees will be expecting a huge increase in pay simply for doing their job. Managing the sometimes unrealistic expectations of employees requires a careful balancing act.

Employers and managers also need to consider the replacement cost of losing that employee if they were to resign, including downtime to recruit, the recruitment cost and potential loss of clients or output. You might not necessarily have to meet them all the way on their expectations, but when factoring what you can afford to pay, you need to consider what your replacement cost would be if you lost that person to one of your competitors.

“Pay conversations can often be a complicated and delicate process for managers and employers.”

The findings from the State of Work Report also show one in five Australians believe they are paid unfairly. Interestingly, more women (46.8 per cent) are not comfortable to ask their boss for a pay rise compared to men (35.2 per cent). The findings come just ahead of a renewed pressure to narrow the gender pay gap in 2019.

With the mounting dialogue about gender pay gaps there is a body of evidence to show that women do not receive the same remuneration as men for equivalent job responsibilities; and when women do ask, there is evidence to suggest their request is less likely to be approved, creating a cycle of discomfort.

Another challenge in closing the pay gap is that current laws do not address pay-gap discrimination, since it’s up to federal lawmakers to influence necessary legal reform in this area. Nevertheless, it has been amazing to see gender pay reporting become one of the biggest business stories last year. We were helped by the #MeToo campaign – but we now have people speaking about eliminating the gender pay gap as a business imperative. That is the next wave we’re about to see.

According to the survey, men are more motivated by money than women, with almost half of working men (46.6 per cent) saying they would work harder if they were paid more.

The expectations of companies and in Australia’s workplace relations framework as a whole, is that you need to see progress year on year. The reasons behind the gender pay gap are hard to shift, so there will be a challenge of managing expectations. But this research and continued publicity will positively push more employers to think about what positive steps they can take.

Jessica Everitt, Talent Manager, Employsure

This story first appeared in issue 24 of the Inside Small Business quarterly magazine.