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Salary negotiations are on the rise: Here’s what leaders need to be wary of

By Nick Wilson | |4 minute read

Forty-five per cent of Australian employers have reported an increase in shortlisted candidates negotiating compensation this year, and 40 per cent report the same from existing employees, new research has found.

According to specialised recruiter Robert Half, compensation negotiations are becoming increasingly common, meaning employees need a more informed approach.

“The cost-of-living crisis means financial compensation is front of mind for workers who are more willing to test the negotiation waters this year,” said Nicole Gorton, director at Robert Half.


That said, it’s not just better financial compensation that employees are requesting, as 34 per cent of employers have seen increased negotiations for both monetary and non-monetary compensation.

“While salary is still king, there is an uptick in professionals who want to amend their benefits to facilitate a greater sense of work/life harmony and options for professional development,” Ms Gorton said.

Continued low unemployment and skills shortages have brought employers to the negotiating table as demand continues to outstrip supply for many professionals.

“In an era defined by skills shortages, employers are witnessing a growing frequency of compensation negotiations, where the pursuit of talent meets the constraints of a squeezed marketplace,” Ms Gorton said.

“As the demand for top talent continues to outgrow the available supply, organisations are finding themselves reconciling the requirements of their business with those of their employees too. They must entice and retain skilled professionals while navigating the constraints of budgets and company policies. In this environment, compensation negotiations have become a critical tool for both employers and employees.”

Against a backdrop of more frequent negotiations and the consequent strain on corporate budgets, it’s crucial that employees know how and when to push for more.

“Before entering negotiation discussions, professionals should keep in mind that they will need to provide evidence as to why their efforts should be rewarded with an improved compensation package and ensure their requests are reasonable,” concluded Ms Gorton.

Robert Half suggests the following four tips to give your negotiations the greatest chance of success:

  1. Contextualise with industry comparisons.
  2. Outline your strengths and how the company will benefit from rewarding you.
  3. Consider non-salary benefits to demonstrate compromise.
  4. Stand by your non-negotiables.

As mentioned in an earlier HR Leader article, it’s important to consider the following factors when broaching salary negotiations with an employer:

  1. Consider the bigger picture.
  2. Get a timeline and clarification on objectives/goals.
  3. Negotiate for other benefits.
  4. Know your worth.
  5. Decide when it is time to move on.
Nick Wilson

Nick Wilson

Nick Wilson is a journalist with HR Leader. With a background in environmental law and communications consultancy, Nick has a passion for language and fact-driven storytelling.