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The alternatives to a salary increase that Aussie workers want

By Kace O'Neill | |6 minute read
The Alternatives To A Salary Increase That Aussie Workers Want

Promotions are always circulating in the minds of both employees and employers. However, as salary budgets tighten, ranging alternatives to pay increases must be considered to reward advancing workers.

The thought of a promotion is an exciting one for an employee, and often, there are hopes of an increased salary to come with it. Now, more than half of Australian workers would accept an alternative to a salary increase if they were promoted, setting a new precedent that is yet to be explored.

Nicole Gorton, director at Robert Half, said: “Promotions remain key to retain talent, and they generally go hand in hand with increased pay. However, with tight compensation budgets, companies are forced to being more creative when promoting employees, and employees are open to accepting alternative rewards.”


According to Robert Half, the top three benefits employees would accept when getting a promotion aside from a salary increase include bonus or revenue sharing (59 per cent), more flexibility with regards to working hours (59 per cent), and more holidays (58 per cent).

On the other side of that, employers were willing to offer somewhat similar rewards to their promoted employees. These included training and professional development (57 per cent), more flexibility with regard to working hours (56 per cent), and paid sabbaticals (54 per cent).

“While financial reward still tops the list, at a time when more employers expect their employees to work in the office more often, flexibility is seen as a bargaining chip that may be just as highly valued by employees as financial rewards. Being able to work from home may also provide a financial benefit to workers by reducing costs such as commuting expenses,” Gorton said.

Although there is some cohesion between employees and employers in terms of the alternatives to a salary increase, there is one outlier that the two parties can’t agree on when it comes to being a sufficient alternative.

Around 57 per cent of employers would offer further training and development in lieu of salary increases when offering a promotion. With no surprise, this form of compensation was not warmly accepted by employees, although it did create a divide between the generations of employees as young workers were more welcoming of the alternative.

According to the data, younger employees are more likely to accept a promotion that comes with further training and development, with 56 per cent of both Gen Z and Millennial workers willing to take the advantage to build their skills in order to gain their next promotion.

“The concept of upskilling and reskilling has gained more prominence due to the rapid advancements in technological innovations and AI. Young professionals especially recognise the need to continuously learn and adapt to stay competitive in the market as they grow their career. With employers also benefiting from offering further training and development, it’s a win-win situation,” Gorton said.

Their older counterparts weren’t as on board, with less than half of Baby Boomers (49 per cent) and Gen X (47 per cent) employees valuing further training and development, displaying that upskilling might not be as high of a priority at this stage in their careers. It was rather naïve for employers to assume that older employees would be satisfied with training and development being a sufficient alternative to a salary increase.

Avoiding frustration from employees when it comes to deciding these alternatives relies on clear communication. If the communication between the employer and employee is efficient and there is crystal clear understanding of the priorities from both parties, then that promotional transaction can be smooth sailing.

“Financial reward is typically the expectation when promoting an employee. When an employer is unable or unwilling to offer a financial incentive, open communication becomes crucial to avoid the employee becoming disgruntled with the organisation, negating the intent of a promotion,” Gorton said.

“By engaging in transparent discussions about alternative rewards, employers can demonstrate their commitment to employees’ long-term success and job satisfaction, reducing the risk of losing talented individuals over compensation concerns.”

Kace O'Neill

Kace O'Neill

Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.