S1: Hello and welcome to It All Adds Up the podcast
S1: where we chat about money, how to get it, how
S1: to spend it, and how to invest it. I'm senior
S1: economics writer Jess Irvine, and you're listening to our summer series,
S1: where we're replaying some of our hottest hits to help
S1: you get in shipshape financial form for 2023. It all
S1: adds Up will resume normal programming in February with a
S1: brand new season full of money saving tips and insights.
S1: So until then, sit back, relax and enjoy. Hello and
S1: welcome to It All Adds Up the podcast where we
S1: chat about money, how to get it, how to spend
S1: it and how to invest it. I'm senior economics writer
S1: Jess Irvine.
S2: And I'm money editor Dom Powell. And today we're going
S2: to get you a pay rise.
S1: Well, we're going to try anyway. We're going to give
S1: you some strategies. But do stick around to the end
S1: of the episode as well, because we're going to be
S1: answering our first listener question about investing in property. And
S1: of course, I'll be sharing my budget tip of the week.
S2: So just you've written recently that there's never been a
S2: more important time to think about asking for a pay
S2: rise because we've got official data that shows that average
S2: wages are rising around 2.6%, but inflation is at 6.1%,
S2: which is a lot higher than 2.6%.
S1: That means that your real wage is going backwards. So
S1: if you don't know what that means, that's you know,
S1: when the price of things are going up faster than
S1: your wage, you can afford to buy less stuff from
S1: your money. So you either have to, you know, slash
S1: your spending or find ways to increase your income and
S1: get a pay rise. So that's what I thought would
S1: be really great to focus on today.
S2: Yeah, and it's also a great time to ask for
S2: a pay rise because the unemployment rate is at a
S2: half century low. So the workers have never had more
S2: power in pay negotiations because businesses just need that need
S2: the workers. So it's a great time to be asking
S2: for for more money.
S1: You can always ask you.
S2: And you can always ask what's what's the harm?
S1: Exactly. And I think we did just want to acknowledge,
S1: you know, we're going to talk about pay rises today.
S1: Not everyone can negotiate their salary because you're on the
S1: minimum wage or you're on award stipulated wages, you know,
S1: and then you are collectively bargaining or you're having your
S1: wages determined for you. But you can always be sort
S1: of pushing for greater progression to be moving up the scale.
S1: And I also just wanted to recognize that we've also
S1: probably got some people running small businesses. And then you're
S1: not talking about going to a boss, but you are
S1: talking about setting your prices and negotiating with clients essentially
S1: for the work that you're doing. So it's an important
S1: conversation for everyone, whether you're a salary earner or earning
S1: income in those different ways.
S2: Yeah, and I think maybe the best way to start
S2: is to talk about the ways that you shouldn't ask
S2: for a pay rise, because.
S1: I've done a few of them.
S2: Yeah, well, I think we've all we've all been there.
S2: And I think number one is to not ask, because
S2: as we said before, you can always.
S1: Ask, you can always ask. And some companies, you know,
S1: have really highly structured pay reviews every set periods of time.
S1: And in some companies the topic just never comes up
S1: unless you raise it. So asking is really important. And
S1: then my other thing is don't wait so long that
S1: you are you have this sort of building resentment inside you.
S1: You have left it for so long and that you
S1: sort of just sort of get in this mood where
S1: you're really feeling resentful to your boss and then you
S1: sort of launch ad on them that I need a
S1: pay rise. I'm, you know, overworked, underpaid, because that's not
S1: a great mindset to to be going into the negotiations with.
S2: Yeah. And I think you should always make sure you
S2: have a bit of a sense of your market value,
S2: know your worth. It's always a good thing to do
S2: in pay rises in life, in everything, in relationships. So
S2: we get into that and you never want to have
S2: no back up. If they come to you and they
S2: say no, do you pay? Right? So you order you
S2: want to have something in the tank for Eve, which
S2: is not a you know, which is a particularly not
S2: an unlikely situation where they might say no. So you
S2: want to have something else to offer. So what should
S2: people do when they're asking for a pay rise?
S1: Yes. So let's flip it around. So there's a few
S1: things don't do. And another one is just don't go
S1: in and start whingeing about lettuce and saying that lettuce
S1: is very expensive and I can't afford it because the
S1: cost of living is true for everyone. But it's not
S1: a great argument as to why you specifically deserve a
S1: pay rise because you are competing with colleagues, I guess
S1: to get that extra money in a way. So yeah, let's,
S1: let's put it in the in the positive and we've
S1: come up with about ten, ten points here, ten strategies
S1: which should help people broach what is I think, you know,
S1: a lot of people find it difficult. Even the idea
S1: of asking for a pay rise will make some people cringe.
S1: And they're just you just don't know how to go
S1: about it. So you mentioned there, Don, what are the
S1: most important steps before you even have to summons any
S1: courage to ask your boss, what should people be doing?
S2: Well, they should be looking around and working out what
S2: the general sort of market value for the job that
S2: you're that you have, what job that you want if
S2: you're asking for a promotion is so total recruiters look
S2: on job websites like very often you can go on
S2: to seek and there will be, you know, a job
S2: that might be similar to yours and will have a
S2: salary range. And if you look at that job and
S2: you look, oh, my salary isn't like that, that gives
S2: you a bit of an indication of of maybe what
S2: you should be asking for, what you could be asking for.
S2: And you can also ask colleagues what they're paid. That's fine.
S2: You can do that sort of subtly. You know, it's, it's,
S2: it's alright to get a bit of a sense from
S2: people you work with or maybe other people in the
S2: industry that you might not work with to see what
S2: they're being paid to, to make sure that you're sort
S2: of on the, on the same page.
S1: I have done, that I'm the annoying friend. I ask
S1: all my friend. NS exactly how much they're being paid.
S1: So I know what all my good friends are being paid,
S1: which is awkward enough. But then I have also been
S1: sneaky and asked colleagues and you have to be careful
S1: because some companies do have pay secrecy clauses where you
S1: can't divulge what your salary is. So you have to
S1: be a little bit careful, but you can sort of
S1: just broach it in terms of a Oh, I'm curious
S1: to know if you would be interested in, you know,
S1: swapping information about a bit of a trade page, which
S1: might be awkward, but maybe you'll discover something or maybe
S1: I will. And we both get information. So and as
S1: a woman, I always say, don't forget to to ask
S1: your male colleagues what they're being paid. And I've actually
S1: found male colleagues are quite forthcoming and wanting to help,
S1: you know, because we do know there is that gender
S1: pay gap. So, yeah, just a little bit of sneaky
S1: research internally.
S2: I see nothing wrong with a bit of sneaky internal research,
S2: is that right?
S1: I'm all for it. But then once you've done your research,
S1: this is a mistake that I have made before into
S1: sort of lobbying, a pay rise, discussion on to a
S1: manager unprepared, you know, and managers are people too, and
S1: they need a bit of time to sort of be
S1: in the mindset to be thinking about your pay and
S1: not sort of doing rosters and other things. So I
S1: think if you are thinking of asking popping the big question,
S1: put it in an email or a message and get
S1: an actual time in the calendar, Schedule some time with
S1: your manager to sit down and make it really apparent
S1: from the get go that you want to discuss your
S1: pay and performance. So it's not a surprise when you
S1: do start talking about it. I think that's really important
S1: to help your boss be prepared for the conversation as well.
S2: And then once you've got that time in your calendar
S2: or you know, you've got a sort of a something
S2: lined up, it's great to sort of sit down and
S2: prepare a one page summary. Don't want to go too
S2: over the top. You know, you don't need to do
S2: a full resumé. They've already employed you. But summary of
S2: your sort of achievements, your current pay and the way
S2: that you might be sort of, you know, achieving over
S2: your current position. You know, that could be something like
S2: customer satisfaction ratings if you're in sort of that sort
S2: of job or your sales numbers, if you're in a
S2: sales job or anything that's anything you can sort of
S2: draw on to sort of really help make your point.
S2: So you can come at it from a sort of a,
S2: you know, cost of living and inflation and pay rise
S2: sort of angle, but then also sort of back it
S2: up with a bit of with a bit of solid data.
S2: So I think definitely worth making sure you have made
S2: a bit of a plan when you come into these
S2: sort of meetings.
S1: Yeah. And particularly if you are feeling a bit nervous
S1: about it, I think that's really helpful to literally have
S1: it in front of you. So you've got some key cards.
S2: Why not.
S1: Make some cue cards, PowerPoint.
S2: Presentation?
S1: But then I think that is pay rise.
S2: Worthy Yeah, I mean, that would be impressed. If I
S2: was a manager, I'd give someone a pay rise if
S2: they had a full on PowerPoint presentation. All the animations. Yep,
S2: that's it.
S1: More interactive graphics as to why I'm awesome. Yeah, but
S1: also if you do sort of stumble in the meeting
S1: or you get flustered and you don't manage to make
S1: all the points, you can also just send that to
S1: your boss afterwards. And I've just following up here, here
S1: is some more points that I didn't get around to mentioning.
S1: So I think that's a great idea. So moving into
S1: the sort of brass tacks of negotiation, one thing to
S1: just mention, everything is negotiable. So even when you're looking
S1: at the job ads and it says, you know, but
S1: usually it's a range, but if it says, you know,
S1: the salary is $70,000, nobody pays the ticket price or,
S1: you know, no, nobody. But lots of people do, unfortunately.
S1: And what we do see is, unfortunately, women tend to
S1: be more reticent in even asking for, you know, an
S1: increase on the starting salary. And I was looking at
S1: some gender pay gap statistics. And even for people under
S1: age 20 with no kids or any any other childcare
S1: responsibilities in there, women are still earning 3.7% less than men.
S1: And part of that is due to just not asking
S1: the question, not saying, you know, just taking the face
S1: value of being so grateful for the salary, but you know,
S1: ask for more.
S2: In the same vein, never make the first offer. Make
S2: sure that the employer is the one that's coming to
S2: you with with the offer of of a pay rise.
S2: And sort of they're suggesting what it is because that
S2: gives you more bargaining power. Like I've got a friend
S2: who's done a number of job interviews recently, and the
S2: employer would always ask him, what would you think the
S2: salary for this role would be? And he would go, Well,
S2: what's the salary on offer? And I would make sure
S2: that he was never the first one to put a
S2: number on the table.
S1: Exactly. Because you don't want to be just from the
S1: get go starting too low. And particularly if you're someone
S1: who is going to undervalue your skills, wait to see
S1: because they may offer you more than you would ever
S1: dream to ask for. So I think that's a good one.
S1: And so the next tip is if they do make
S1: an offer to you, never accept the first offer. So
S1: whatever it is, even if it's wildly above, you know,
S1: what you were thinking, you know, you've wanted a pay
S1: rise and they suddenly come back and say, yes, here's.
S1: $5,000 extra a year. Never accept that. Just go. Oh. Oh,
S1: Thank you. Thank you for that proposal. I'd like a
S1: little bit of time to think about that. If possible,
S1: you can do some delaying and then always come back
S1: and ask for more so you can say, I really
S1: appreciate you coming to the table with that. I think
S1: that I'm worth a little bit more. I think I'm
S1: worth $10,000 more a year and see how they go,
S1: because what they offer you is rarely the final of
S1: what they can truly pay you.
S2: And I mean, you know, in this it is power
S2: to the workers here. So we're just going to keep
S2: on table and hitting it with these with these with
S2: these strong sort of communist vibes here. But, you know,
S2: ask for double what you want. Like, you know, think
S2: about how much of a of a pay rise you
S2: want and then ask for twice that. And like I
S2: know that might sound like ridiculous and outlandish and whatever
S2: but again all you can do is ask and then
S2: if they come back to you and say, well, look,
S2: we can only offer you half of this, and then you. Right.
S2: What you started exactly getting what you want.
S1: So they go, Yeah, happy days. And don't forget that
S1: your boss is probably paid a lot more than you.
S2: Almost always, I think is the idea.
S1: Well, that's the whole point, you know. So use your
S1: view for what might be an audacious sum to ask
S1: for is still going to be smaller than what you
S1: know your boss is on. They're still going to think that,
S1: you know, it's not going to seem audacious to them
S1: unless you really are just walking in and saying, I
S1: want $200,000 for my retail worker position.
S2: Yeah, I mean, there are some caveats here.
S1: Yeah, but we're trying to get you to try. You
S1: got to have a have a crack. Yeah.
S2: Have a go to get a guy. Is someone famous.
S2: One said.
S1: Who said.
S2: That. I think some politician anyway.
S1: So I mean overall I think the mindset that you
S1: take into this is important and people sort of have
S1: a sense of oh, it's my boss is going to
S1: be annoyed with me, I'm going to be an inconvenience,
S1: but actually try to flip that. And, you know, having
S1: pay negotiations is a crucial part of the job of
S1: being a manager of people. And by by initiating the conversation,
S1: you know, they're expecting it. Bosses expect people to ask
S1: for pay rises. And if you are really a good
S1: performing employee, it's better for your work output, it's better
S1: for your boss that you do talk about it and
S1: you don't have that resentment that builds over time because
S1: you haven't asked for what you think you're worth. So
S1: just trying to have a mindset of, you know, this
S1: is a good conversation for everyone to have and not
S1: to put off.
S2: Yeah, and you can always come in with things that
S2: are not necessarily strictly pay rise related like a lot
S2: of jobs, offer perks, you know, personal development funds, some
S2: jobs give you free gym memberships and all that sort
S2: of stuff. Like there's a lot of things that, you know,
S2: if you don't necessarily or if you can't necessarily get
S2: a full monetary pay rise, you could ask for more
S2: annual leave or more flexible hours or more training or
S2: something like that. And then you can use those things
S2: to then maybe build your case for a pay rise,
S2: you know, in 12 months time.
S1: Yeah, and that's a really important thing to think about.
S1: If the boss does actually say no, you have to
S1: prepare some strategies for if they do say no and
S1: asking for, you know, those alternative things can be one
S1: of one of the strategies you do, you know, you ask,
S1: you know, they say no, but could I have this
S1: and that instead? Another good thing, I think if if
S1: the boss says, no, don't just let it slide until
S1: the next year. A great way to say follow up
S1: on that is like, well, can we talk about it
S1: in another three months, six months? And then could you
S1: give me some idea of what I would need to
S1: do in that time period to sort of have this
S1: conversation again and for you to feel that I've really
S1: demonstrated that I'm working at capacity and that I'm doing
S1: good things, you know, So come up with a bit
S1: of a a short term plan if they do say no.
S2: And then if all else fails, get up and leave.
S2: You can do it.
S1: Walk out the door, speak up the door.
S2: Stuff in a box, get your plan, put it in
S2: a nice box and walk out the door. You can
S2: do it. The job market is hot. It's so hot.
S2: You can you could you could find another job, depending
S2: obviously on your job, but you could probably find another
S2: job pretty easily. So don't be afraid to walk out.
S1: Yeah. I mean, have a plan, you should say, you know.
S2: Just go. Just leave.
S1: Just, you know.
S2: Okay.
S1: David, do you seriously have a plan? You know, if
S1: you've done your research, you know, maybe you've talked to
S1: the competitor organizations, maybe you've got an offer from an
S1: alternative competitor, or you just know that, you know, the
S1: employer down the street is paying more. Yeah, leave. I mean,
S1: it's it's it's just not the usual thing anymore that
S1: you would stick with one company for your whole career.
S1: And the surveys do show that people who do switch
S1: jobs more often to alternative employers, they do get paid more,
S1: you know, as their careers progress. It's a great point
S1: to negotiate your salary again and really go to where
S1: your skills are valued.
S2: Yeah. And that's the number one thing. You want to
S2: be valued. You want to be paid what you're worth.
S2: And that's why we're here trying to tell you and
S2: help you that you should be paid what you're worth.
S2: So go out there, ask for a pay raise and
S2: see how you go. Because as we've said a few times,
S2: all you can do is ask.
S1: You should ask.
S2: And you should. And you should. Now onto Allison, a
S2: question for the week. Our question this week is from Michelle,
S2: who's sent in her question, and we really appreciate it.
S2: So please send in all your questions. We would love
S2: to hear them or read them. Michelle asks, How do
S2: you get into the property investment market when prices are
S2: still quite high? Should I wait until interest rates go
S2: higher and prices fall? Jess, what do you think?
S1: Yeah, so this is trying to time the market, I think.
S1: And that is something that lots of people would tell
S1: you is very hard to do, trying to pick pick
S1: the bottom. I mean, I think and I have written that,
S1: you know, I may be interested in getting an investment
S1: property one day. The thing about that is that as
S1: interest rates are going up, we've got prices coming down.
S1: It's always a double edged sword. So that's might be
S1: great because prices might get cheaper. That is happening because
S1: interest rates are going up. And when interest rates go up,
S1: you can actually borrow less. So there's always swings and roundabouts.
S1: My view is that if you have considered what your
S1: alternative strategies are, whether you you know, if property investment
S1: is going to fit into your goals and objectives, if
S1: you've considered alternatives, if you've got, you know, your emergency
S1: fund of 3 to 6 months sitting there, you do
S1: know that you have some spare cash flow to invest.
S1: Then just try not to sort of get too absorbed
S1: in the noise of of property prices going up or down.
S1: You know, what's really going to determine whether property pays
S1: off as an investment for you is whether you borrow responsibly,
S1: whether you buy a property, you know, that is, you know,
S1: reasonably priced with good, you know, long term capital growth prospects,
S1: you know. And that's a really individual question as to
S1: which markets you're looking at buying into. So just doing
S1: all your research, getting a handle on your budget and
S1: realizing if you have the cash flow, if you do
S1: have it, and if you're a long term investor, you're
S1: planning to hold the property for decades, you know, it's
S1: all going to come out in the wash. So my
S1: tip is don't try to time the market.
S2: Yeah. And if you look at property prices in Australia,
S2: they tend to go up.
S1: Over time, but they can over time they can dip.
S2: So it's I think timing the market is is difficult
S2: to say.
S1: But be in it for the long, long term investment.
S2: Here. Yeah. Just around us off. What's your budget tip
S2: for the week Geoff.
S1: Yes. So petrol prices have been bobbing around a lot
S1: but if anyone is not using petrol price apps, you're
S1: making me cry. That's really bad. There are price comparison
S1: apps in every state, and when I fill up, you know,
S1: it can be the difference of 40 or $0.60 per
S1: litre for a station that is just across the road.
S1: So just like letting the people know if you're in
S1: New South Wales, your app is fuel check, download it now.
S1: If you're in Victoria, the RACV has a site as well.
S1: And for everyone else and including those states as well,
S1: this national sites like GasBuddy, petrol, spy and motor mouth.
S1: And I should also mention the 7-Eleven app, if you
S1: want to download that, it has a price lock feature,
S1: which means if you know that prices are about to
S1: take off, you can duck into a 7-Eleven or you
S1: just have to like drive past it and it scans
S1: for a 7-Eleven in your area and you can lock
S1: in a low price that you can then redeem over
S1: a seven day period. And then you do need to
S1: just check that the 7-Eleven price is still the cheaper.
S1: So you go back to your original price check app,
S1: but get on it.
S2: I love I use petrol spy all the time, you know.
S2: I do, yeah. Yeah. Big fan. And there's this little
S2: petrol station just around the corner from me, which is
S2: like independent and has like three pumps and it is
S2: the cheapest fuel. This is my secret for anyone who
S2: lives in the like Melbourne's north. There's a little, little
S2: petrol station in Ascot Vale. Cheapest fuel around this much.
S2: That's my guarantee. That's my budget. Tip of the week.
S2: All right, well, that's it. And don't forget, ask your
S2: boss for a pay rise. Let us know how it goes, then.
S2: US an email. Did it work? Are you now filthy rich?
S2: If so, give me some. And we'll see you next week.
S2: This episode of It All Adds Up was produced by
S2: Cheech Chong. The information discussed is general in nature and
S2: does not take into account your personal financial situation, goals
S2: or objectives. You should always do your own research or
S2: get professional advice before making any major financial decision. If
S2: you like today's episode, it follow a new podcast app.
S2: Leave a review and recommend it to all your friends.
S2: You can also submit your listener questions in text or
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S2: Thanks for listening.