Wait for a pay rise or go for a promotion?
By Hamish Williams
So you’ve been in your current role for a while now, you like the company and you enjoy your role. The only problem is your salary has only marginally improved over the few years you’ve been there. Meanwhile, you’ve taken on more responsibility and developed a working routine that’s made you a model of productivity.
Surely a star performer like you deserves a pay rise, right? You speak to your manager and he/she tells you that you aren’t the first person to ask. In fact, everyone in your department has asked for a pay rise recently as it turns out they likewise feel they’re the star performer.
The answer is no for now but the board is currently considering a companywide increase in line with CPI. Maybe, if you keep your head down and produce some good results, you can try your luck again at performance review time. Isn’t that what they said last year though?
Unfortunately, this is not a unique situation. AIM’s 2015 National Salary Survey revealed that salary increases are at their lowest level in 12 years. At a projected figure of only 3.1% over the current year, it’s important to point out that figure is an average across all sectors. When inflation is considered, this means salaries in many industries are actually going backwards!
While the figures did reveal some pockets of optimism for those in IT or Engineering, the vast bulk of employees in professional services and the service industry have some grim financial prospects ahead of them. While the cost of living and house prices rise like a tidal wave on the horizon, you might be looking at the ill prepared financial life raft you’re currently paddling and wonder how you’ll cope in the uncertain economic future ahead.
The good news is you don’t have to cling to the status quo and hope for the best. Securing a promotion is the fastest method for increasing your income short of robbing a bank or winning Powerball. Whether it’s within your current organisation or with a new employer, there are roles available right now that pay substantially more than you currently earn. Best of all, these roles could be within your reach sooner rather than later if you began taking the appropriate steps today.
People move up in their careers when they focus on a combination of three complimentary career components. You’re probably already doing the first component which is increasing your on-the-job experience. The second component involves building your internal and external networks. The third and perhaps most crucial component is undertaking further study.
All of these components take time to develop but when done in concert, they’ll undoubtedly open doors to new career opportunities. So the question is will you be better off waiting for a pay rise in your current role or by securing a promotion into a new role further down the track?
Let’s look at an example to see how these options look in practice. If you’re a moderately experienced HR Coordinator earning a gross salary of $70,000 a year, how much would you expect to earn in ten years’ time? The current rate of salary growth is at 3.1% however inflation will need to be factored in as that is the rising cost of living. With inflation currently at 1.5%, your real salary increase will only actually increase to around $81,200 in ten years’ time. Is that worth slugging it out for the next ten years’ worth of performance reviews?
On the other hand, if you actively sought out new professional experiences and networking opportunities while undertaking postgraduate study, you could secure a considerable promotion within the next ten years. In that time, a Financial Controller could work their way towards a Chief Financial Officer role, earning upwards of $130,000!
While the above examples may appear as hypothetical best and worst case scenarios for only one industry, the numbers are based on real salary data. Even with fluctuations in salary growth rates and inflation, the evidence is clear that the only way to guarantee a real salary increase is through a promotion.
At AIM, we believe postgraduate education is the most effective way to fast track your way to a promotion. We know postgraduate study is not a decision to be taken lightly. With such a significant investment of time and money, you need to be sure you’ll see a return on your investment.
As the old saying goes, an investment in education truly pays the best interest so invest in yours today.