Manage your salary expectations ahead of 2027

As employees become more scrutinous of organisational values, employers are being urged to prioritise transparency when negotiating salary and non-monetary incentives.

Further to a recent Employment Hero report that suggested employers are placing more weight on non-monetary entitlements and other benefits to retain staff when pay increases aren’t possible, HR Leader spoke to employment experts to examine how organisations can balance employee expectations with organisational reality.

EMA Relations principal consultant Ming-Lynn Hii said that enterprise bargaining – especially when it comes to non-monetary rewards – remains one of the most underused and creative retention tools, as it allows for open and honest conversations.

Reflecting on the right way to navigate these conversations, she said: “Be upfront and don’t lead people on … share what you can.”

“A clear ‘not yet, and here’s why’ meets people’s basic social needs for certainty and builds trust more than a vague promise that never materialises.”

Hii explained that negotiating can only function fairly and effectively when transparency is involved, both with respect to a salary range and criteria.

“If you’re negotiating with an existing employee who’s weighing up other offers, do your homework: what are their niche skills worth, and what would it cost to replace them? If you can’t commit to an unconditional increase, consider a conditional one linked to productivity, profit, or funding,” she said.

Hii reinforced that non-monetary rewards are not a replacement for fair pay.

Joel Hayden, practice group leader at commercial law firm LegalVision, said that asking employees about non-monetary benefits also helps employers develop arrangements that suit their workforce, particularly with regard to flexible working arrangements, additional leave, professional development, and career progression.

However, Hayden urged employers to prioritise their legal payment entitlements before considering discretionary benefits, ensuring all salaries meet award and enterprise agreements, and are correctly classified.

“Employers are generally not legally required to approve a discretionary salary increase because an employee requests one. However, they must still comply with any increases required by legislation,” he said.

“It’s also important to distinguish between an employee requesting higher pay and raising a concern about their legal entitlements. Employees have workplace rights to make complaints or enquiries about their employment. Employers must not take adverse action against them for exercising those rights.”

In this way, Patrick Will of Liquid Employment Lawyers said that employers risk legal and reputational consequences when undervaluing employees, as well as quiet quitting, low morale, and high turnover.

“In a tight Australian talent market, low offers signal a poor corporate culture. The business risks losing top-tier talent to competitors, leaving them with an underperforming workforce,” he said.

“The hard costs of recruiting, onboarding, and training in a replacement almost always eclipse the initial savings of a low-ball offer.”

Danny King Legal corporate counsel Tristan Cutcliffe urged employers to avoid false or open-ended promises about the future.

“If you don’t know whether the organisation will be able to offer the employee more later, then say that. On the other hand, you might really believe that there is a possibility that in the future, the organisation might be able to offer more,” Cutcliffe said.

“If that happens – communicate as soon as you know that circumstances have changed and, as far as you can, tell the employee why and what that means for them.”

Cutcliffe also highlighted the importance of documenting the process, noting: “Ensure that your verbal communication aligns with your written communication – there is little point in making an offer sound inflated and stating the overall ‘package’ number if you know that the candidate could misunderstand the number to be their base salary.”

In relation, Hii urged employers to establish expectations early and practice period pay reviews.

“That means clear position descriptions, a transparent remuneration framework, and regular conversations about job satisfaction, pay, and progress, rather than leaving everything for the annual review,” she said.

Hii added that salary benchmarking should not rely on a single source and highlighted the importance of referring to industry association data and reputable salary surveys related to the specific industry and state.

In the same vein, Will suggested candidates and employees be provided with a comprehensive Total Rewards Statement that “highlights the financial value of non-monetary benefits, allowances and superannuation, giving employees a holistic view of what the business actually invests in them”.

Reinforcing that negotiations be rooted in employment law, Will said: “With recent legislative changes such as closing the loopholes, pay secrecy protections and a heightened focus on wage compliance in Australia, salary negotiation is no longer just an HR function, it is a critical compliance issue.”

Regarding compliance, Hayden also noted that employers should be aware of discrimination risks when it comes to differences in remuneration based on protected attributes, such as sex, age, or disability, and take steps to avoid unintentional assumptions that impact negotiations.

In this way, Hayden said: “Clear employment contracts and regular remuneration reviews can help prevent disagreements before they escalate.”

Cutcliffe also noted that the rise in agentic AI can affect employee expectations around salary, especially if they are told misleading information, and that this increases the imperative for employers to be clear about the considerations they rely on to form an offer.

“Make all of the components of an offer clear,” Cutcliffe said.

“Not everyone will understand that the remuneration ‘package’ includes the superannuation contribution. Set out the components in the employment offer – what is the base salary, and what is the superannuation contribution. If there are elements that are variable – make those clear. If the variable components are discretionary – make that clear.”

“Tapping into the positivity that is usually generated at the negotiation and offer stage is actually a great negotiation tactic – just remember to balance that positivity and enthusiasm with a healthy dose of clarity and transparency.”

Want to see more stories from trusted news sources?
Make HR Leader a preferred news source on Google.