How to ask for a pay rise during a cost of living crisis

If you're struggling to make ends meet but don't know how to ask for a pay rise, you're probably not alone. 1News' Lucy Anderson chatted to author and career coach Tom O'Neil about having that awkward conversation.

O'Neil shares five top tips for addressing the issue at a time when most workplaces are tightening their belts.

O'Neil said the first thing you can do is assess whether there's an opportunity for "an increased salary without an increase in salary".

"What I mean by that is are there other things that the company doesn't mind doing that don't actually cost money? For example, working from home. If you can work from home two out of five days that may be worth about $10,000 to you.

"Are there other ways that the organisation could effectively improve your situation without necessarily paying money?"

He said it could mean your workplace provides discounts on products, allowances for childcare, mobile phone allowances, petrol vouchers, or paying for learning and development opportunities.

"It may be easier for a company to say they'll put you forward for learning opportunities rather than pay you an extra $5000. It's very difficult to come to an organisation that's struggling or having to lay off staff and then say 'Hi, can I have a wage increase please?'.

"To some degree, you'd be putting a target on your back."

O'Neil said it's essentially a way of trading money for happiness.

It's essential to know what your job is worth in the current market, O'Neil said.

He said this means researching what other people in the same field are being paid.

"You can do this in a variety of ways. You can go online to Seek, LinkedIn, Trade Me, and look at similar roles and sometimes they'll have what the role's paying."

He said you can also speak to a recruiter, who will have a better idea of what certain jobs are paying.

"If you find there's quite a discrepancy between what you're on and what your role is worth, then you've got some really good information to go to your employer with."

O'Neil said it's important to have evidence as to why you deserve a pay rise.

He said most people will have achievements they've met or certain KPIs they've hit, and this is good "evidence" to present to an employer.

He added that it could also mean you've been given extra responsibilities and your role may look different to what it did at your last pay review.

"You may have helped train or mentor other people, and all these things show a person's value, but if you go to your boss just asking for say an extra $15,000, they're likely to say no.

"But if you go to your boss and demonstrate your value over the past 12 months, it's a lot more difficult for them to tell you no if you've proved yourself to the organisation."

He said you need to map out your achievements in a way that clearly defines why you deserve more money.

O'Neil said that just before company budgets are set is an ideal time to ask for a raise.

"I'd probably hit them up a couple of months before, just while they're figuring out those numbers. After they've gone and put a firm budget in for salaries, it can be very difficult to then ask for more money."

He said the right time to ask depends on when the financial year for the business is.

"Realistically the other best time is probably March, April or May because the whole year is ahead and there's still lots of opportunity. When you're coming to the end of the year it's a bit more difficult, but the problem for most people is that when the year draws to an end, they tend to think about pay more."

He said this is usually because people start to reflect on their life and their job as Christmas and the New Year approaches.

"But in actual fact, your boss is probably focussing on winding down and will get back into it next year.

"So personally, if there was a perfect time outside the finance end of the year, I'd say early to mid calendar year."

O'Neil also added that a lot of people come in hot asking their employer for more money and can often get wound up.

He said it's important to keep your cool and not "demand" a pay rise.

"Always have a respectful approach, people can be bitter and it becomes a bigger deal than what it really is. It's supposed to be an adult conversation."

He said to make sure it's a "proper meeting", warning your boss the week before and being clear about what you want to discuss.

After putting in a lot of effort, it can be disheartening if your boss doesn't agree to pay you more.

But O'Neil said this isn't the end of the world, and there are still things you can do.

"See if you can negotiate a performance-related process where you put a timeline on it and say 'look I'd like to raise this issue again in four months time'.

"Then really just make sure you work your backside off so that when you have that next meeting, you're in a far better position to be able to negotiate.

"A lot of the time the money's just not there, but your boss may say they'll be redoing the budget soon. You can revisit it then and now you know there's an actual date in the future where you can have that conversation and both of you can be prepared and ready to go."

He also said another thing to think about is your job title. While employers may not be able to pay you more they could change your title — which brings other benefits.

"Because that way when you go to the market, it does reflect that change so now when you talk to recruiters, they will see you at that different level."