You have just found out that someone is getting paid more than you, and you are incandescent with rage. You want an immediate review of your hourly pay rate. You're mad. You feel ripped off, and you want justice. Well, here is what NOT to do on your way to negotiating a temp pay increase.
Compare yourself to the person next to you
Stop talking about money with your colleagues. Quite frankly, it's none of their business what you get paid, and it's none of your business what they are paid. You have negotiated and accepted a pay rate to take the job, and they have done the same. There is a fine balance in pay rate negotiations – there is what the job is 'worth', there is what the client will pay, and there is what the casual employee will accept. Most times, the client’s budget dictates how much a temporary employee can be paid, but the power is not always with the client. There is nothing wrong with asking your consultant if there is room to move on the base pay rate – but do this at the time of accepting the assignment.
Call another agency when tired and emotional
This happened to us last week. A casual employee working with one of our clients through another agency found out that his base pay rate was less than our temporary employees. He called our consultant and demanded the right to be able to work through us. The short answer is: we can't do anything about this. The other agency introduced the casual employee to the client, and the employment relationship is clearly with them. We have no rights to or responsibilities for casual employees working through a different agency. The only thing our consultant could do was tell the temp to call his agency and talk to them about a pay increase....calmly.
Complain about the money your agency makes from you
Ahh, my favourite. I will be brutally honest; we are not a charitable organisation. We charge a margin (our revenue) in addition to the candidate's pay rate, because we are in business. Hopefully, we actually make a profit! Agency margins are being squeezed all the time. There are some industries where a high margin is still standard operating practice, but we operate in a free market environment, and with competition that is happy to 'give away the farm', so to speak, we don't actually make as much profit from you as you may think. For a start, you can't look at the difference between what you are being paid and what we are charging the client and think of that as profit. That difference includes all of your on costs (super, payroll tax, workers comp insurances and so on), and then there is the cost of doing business, consultant salary, advertising, administration, systems, rent, equipment…the list is endless, believe me. There are recruitment businesses struggling and, unfortunately, entering administration in Australia all the time. You might think it's 'money for jam', but it's an expensive business to run. Sales can be high, but the profit negligible. The impact on cash flow is significant.
So what should you do if you want your pay rate reviewed?
Here are my tips on negotiating a pay increase:
- Before calling your consultant, review the job you have been doing. Are you doing more than what you were originally employed to do? If so, this is an excellent place to start from when negotiating a pay increase.
- Understand what award you are covered by and what the minimum rate is for that award. Your agency is required by law to tell you what award you are working under (if applicable) and how your grade/level pay rate is calculated. If you are concerned you are being paid below award level, you can easily check this against the modern awards listing on the Fair Work Australia website. If you find that your pay rate is too low, call your agency and quote the award, grade and minimum rate – they should immediately review your pay rate as a result.
- Be nice! It's not easy asking for a pay increase, and we are all emotionally involved in what we get paid, but approaching a pay rise with an aggressive manner will immediately put your consultant off. They will stop listening to what you say because they will be focusing on how you are saying it. Try to be calm and reasonable. Be polite and be prepared to wait for a definitive answer. A consultant will never agree to a pay increase off the bat; they need to take what you have told them, analyse the role and talk to the client before giving you a final answer.