Annual Pay Negotiations at Medium IT Service Provider Firm

tightdesibanda on 24/02/2023 - 09:21

Morning OzB Fam! A friend has been working for a medium sized IT services provider firm as a Java/React Developer for a year. When he joined last year, he didn't quite negotiate his way in as he had never worked in private industry before, so he just accepted the first offer.

He is really good at what he does and can easily get a pay rise if he changes job in the current market, but is also quite liking it there. So first preference is to negotiate salary. Good programmer but not so good in negotiating pay.

Is there anyone from the IT industry (developer) willing to share how the annual salary review works? Is it a percentage increase across the board or offered to individuals based on their skills/value?

Education & Work

Comments

  • Donaldhump on 24/02/2023 - 09:32
    +3

    what person A gets might be different to person B and its all negotiable

    Company may determine annual % based on KPIs, but if your mate (you) are underpaid and think you can get more then ask for a pay rise and if you do not get it then make decision to leave.

    most companies won't budge on pay other than crap CPI% till you ask / hand in your notice, and many companies end up with staff leaving, replacing them with new staff at the now initially desired pay rate with 0 knowledge of company.

    best way to get a pay rise is to leave

    • boomramada on 24/02/2023 - 09:59
      +2

      but if your mate (you) are underpaid and think you can get more then ask for a pay rise and if you do not get it then make decision to leave.

      But hiring someone cost money to the business, hence, the best approach would be negotiated based on how important you are to the business. Or apply for another job and once you got the offer, then negotiate or just leave.

  • hentabara on 24/02/2023 - 09:54
    +2

    In general,
    1. Try to gather all achievements that he has done.
    2. Gather all new responsibilities that he took.
    3. Say gently and firmly, I would like to have salary increase to be $xxx as I think it is my value.
    4. If they say no, or only agree to amount $yyy. Try to ask for extra annual leave or flexible working arrangement.
    5. If it is still not satisfying, get a new job.

    • Drakesy on 24/02/2023 - 12:43
      +1

      Just skip straight to 5. and present the contract to them.

      TBH 1-4 will just be laughed at

  • jug123 on 24/02/2023 - 09:56
    +8

    While I love a great salary as much as the next person, sometimes its worth taking a little less if its a great place to work. Sometimes u change companies for an extra $10k, $20k, $30k+ ,etc but ur working hours are miserable due to boss, culture, workloads. Grass isnt always greener. Just saying

  • geek001 on 24/02/2023 - 10:13
    +2

    In my own experience, the only way to get a decent payrise is to change job or if you already have another offer on the table. I would initially bring up the payrise during my performance review, but get knocked back for [insert corporate reason here]. A lot of the time, the company will only agree to a decent payrise is when I hand in my resignation, which is too late, in my view. Not saying all companies are like this, but it is my own experience, generally speaking.

  • Porker on 24/02/2023 - 10:16

    Is your friend asking through you because he wants a pay review or are you asking because you think your friend is underpaid?

    Your friend might be totally happy with where he is at and you interfering might upset that balance. Money only plays a part of job satisfaction.

    The values or means at which you or others work with might not apply to him or his personality or other attribute etc.

    • tightdesibanda on 24/02/2023 - 10:28

      He wants the pay rise, and we discussed it the other day but I'm not in the industry. Basically, in last 12 Months his rent has gone up 21% and living in Sydney (close to CBD) plus other expenses risen proportionally, so he was thinking about getting a second job. That's how this conversation started.

      • Porker on 24/02/2023 - 10:34

        While you say your friend started work last year, has he had his 12 months anniversary? I wouldn't have thought that a pay increase was on the cards until a year's placement.

        I'd say requesting an increase in pay within the first 12 months of working is a bit 'pushy', unless you can back it up with (say) a letter of offer from another employer

  • Ocker on 24/02/2023 - 10:18
    +3

    Gotta love these "I have a friend " posts.

    • tightdesibanda on 24/02/2023 - 10:29

      It's legit this time I swear 😂

  • Gunnar on 24/02/2023 - 10:33
    +1

    You are such a good 'friend'

    https://www.youtube.com/watch?v=WprLo8snqZo

  • Hellfire on 24/02/2023 - 10:39
    +1

    Typically there will be a percentage that the org has budgeted for pay reviews. This is often around 3% but may be higher in the current market. A good worker might get up to double that (and a bad worker might get down to 0).

    If you want a more significant pay rise then you need to show both your value to the employee (ie what have you contributed above and beyond the minimum requirements of the job) and that you are being paid less than the market average. Most orgs will not want to go above a certain amount which is usually around 10%.

    To get more than that your friend has to be prepared to lay down what they want and walk if it isn't met.

  • Gebb on 24/02/2023 - 11:03

    Build a business case, in the same way he applied for the job and highlighted all his capability he needs to do the same here. It might also help to understand how much % or $ he is seeking? As pointed out above the cost of replacing someone is significant and not in the companies best interest unless they want that person to leave.

  • Drakesy on 24/02/2023 - 12:41
    +4

    Only way you'll get anywhere.
    Find another job and get a contract in writing.
    Present contract to current job

    Pay rise discussions without any leverage in this day and age will go nowhere.
    Loyalty is dead, private companies would rather have profits than pay their employees a decent salary.

    • eek on 24/02/2023 - 15:27

      Agree with this 100% after going through the process at least half a dozen times now. By the time you receive a new contract offer from new employer, you're almost already out the door already. It's too late for current employer to retain you.

  • tightdesibanda on 25/02/2023 - 23:06

    Thank you everyone for the great insightful comments. I'll pass it on to him :)

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