Should you ask for a pay rise in 2023?

If you’ve made the commitment to focus on your career and save more money in 2023, you might be hoping for a pay rise in the near future. With talk of an upcoming recession and the cost of living hitting eye-watering new heights, it’s easy to feel a little bleak about your career prospects right now. So we asked the big question for you: Is 2023 the year to ask for a raise?

The answer is not quite that simple. 

What is impacting your ability to get a pay rise in 2023

The world is a very different place in 2023, not just with regards to your personal finances but with how the global economy is looking.

The unemployment rate is sitting at an historically low 3.5% according to the most recent data from the Australian Bureau of Statistics (ABS). Generally speaking, high employment means high wages, but there are a lot of other factors at play here. What it does mean is that there is a lot of competition for high paying roles and promotions.

Keep in mind that 91% of employers reported skills shortages, and 58% reported an increase in staff turnover (according to the Hays 2022-2023 Salary Guide ). If you are uniquely skilled in a specific role, you may be of higher value to your organisation.

This skills shortage has driven intentions to reward employees in skilled roles with pay increases. Most (51%) employees do intend to cap these raises to 3% and under, so if you’re asking for a raise, be aware of the restrictions that may be in place.

Australia could see a number of external influences over the coming year. Forecasts differ as to Australia’s likelihood of entering a recession in 2023, which will greatly impact the ability of companies to make movements on pay. Tech and finance companies have, in particular, begun to cut back in preparation for similar conditions to the 2008 global financial crisis.

What can I do to be pay rise worthy in 2023

Your best bet might be to consider what you can do to put yourself in prime position for a pay rise in 2023. 

• Upskill — With a skills shortage being cited, looking into training or upskilling in specific areas might be a worthwhile investment. This can make you more of an asset in your role, or give you the edge over other employees vying for similar positions.

• Work from the office —  Though more and more people have adapted to flexible working conditions, promotions are often still guided by employee visibility. This means that in traditional office-based roles, turning up to the office a bit more often may improve your chances of landing that promotion.

• Look for opportunities — It may be easier said than done, but what can really strengthen your case in the boss’ office is having some irrefutable evidence of when you have been indispensable to the team, or when you have been a part of a profitable project. This can help to underline your role in bringing money to the company, which is always going to be a primary concern.

How to ask for a pay rise

When it comes to getting more money, there’s only one way to do it, and that’s to bite the bullet and ask.

A Mozo survey conducted found that men were significantly more likely to ask for a pay rise than women. This doesn’t surprise careers coach Kater Boorer. The founder of peer-to-peer networking and advocacy group Young Professional Women Australia , she got frank speaking salaries with Mozo.

“In my experience, women are less likely than men to quote a number that reflects their true value [in an interview], and one in two is underpaid by $20,000 or more,” Boorer said.

If we do move towards an economic downturn, you should be prepared for all possible outcomes. Boorer recommends getting started as soon as possible and knowing how to respond to (or negotiate with) a ‘no’. 

“Remuneration conversations need to happen three to six months before decisions are made, because that’s when budgets are being done. Even if you get a ‘no’, it’s a marker in the sand. So, when you come back to the conversation in six or 12 months' time, [employers] are less likely to say no twice in a row,” she says.

“Or, if you can’t get a pay rise right now, can you negotiate four days on your existing salary, or perhaps get a title change or training? There’s the opportunity to get creative with the way we do these things.” 

With a clear pathway for progression, a pay rise can be a tangible reward rather than a bit of wishful thinking.

You may also want to begin taking note of all of your “wins” and “value-adds” through the year, particularly if your company is not in the business of doling out extra pay. That means that when it does come time to evaluate pay across the board, you’ll have some concrete evidence ready to bring to the table.

It’s important to make sure you’re spending and saving wisely with the money you are making, so take a look at some of the savings accounts below to start your search.

If things are feeling a little more strained than normal this year, check out our guide to handling money pressures in 2023. Otherwise, you can find more finance fun with this year’s banking buzzwords and savings hacks.