One of the more common questions we get asked is, “What’s the market rate for someone with my experience?”
The short answer is, it depends, and is rarely purely a function of tenure/years of experience.
Consider this example with respect to two people, with the following identical experience, in business services:
The salary they are likely to be earning can range from $50K + Super through to about $75K + Super.
So what is the reason for the variation?
The person earning $75K+ Super will most likely have the following additional attributes:
Experience working directly with clients and managing those relationships with direction from the managers/partners as required;
Average client with revenue of $5M +
Experience working on more complicated tax advisory and compliance issues;
Some corporate advisory/process improvement experience.
There are lots of reasons why someone with the additional experience, outlined above, will get more money, however, the main one is:
The more autonomous an employee is the greater the value they can add to the business they work for. By that I mean, if your manager needs to have a meeting with you to tell you everything before you do it, the cost of that hour (managers salary + your salary) is greater than if you receive the brief from the client and submit your work for review.
Why is this information important for performance and pay reviews?
It is reasonable to assume that most employers think they are paying employees a fair salary;
Telling your employer you are underpaid, without being able to substantiate the reasons why, carries very little weight and makes you look (I hate saying this) “ungrateful” for the time they have invested in your development;
Like anything, presenting a well thought-out argument with the reasons why, encourages discussion on potential points of difference, giving you a better chance of achieving a positive outcome.
What is the best way to approach salary and performance reviews?
At the start of your career the experience you get is far more valuable than the money you earn.
If you are getting the right type of experience early in your career, in 4-5 years it will take you 6 months to earn the same money it takes you 12 months to earn now.
Provided you are performing well in your role, if you approach your performance reviews with the attitude that you need more experience in certain areas, rather than money, you are more likely to get favourable outcomes because:
It costs your employer nothing to give it to you;
Your employer will be confident you have the right attitude to career development;
They will be more likely to invest more in you in the future because they will know what you want;
You will have a stronger argument for a pay rise in your next performance review;
You are making yourself more valuable to current and future employers;
A few closing points:
If you are determined to ask for more money, you need to be able to demonstrate the reasons why you are worth it with real examples;
Ask questions rather than demand. For example, if you received a 2% pay rise and you have been told you have “exceeded expectations” a good question would be, what do you need to see from me to get a X% pay rise or be given Y responsibilities in the future?
If it is clear that an increase in salary won’t happen, aim for commitment on other things such as staff/client management;
Remember, most employers think they pay employees well so requests for more money might be news to them. Use your better judgement and make sure you know what you want to say and how you want to say it;