Salary negotiations on the rise amid low unemployment rate

Compensation negotiations have spiked this year in Australia, according to a new survey from Robert Half, with employers pushed to reconcile the demands of their organisation and their employees amid a tight labour market.

The Robert Half poll, which surveyed 300 hiring managers, found that 45% of employers are seeing more shortlisted candidates negotiating their compensation this year than last year.

Another 40% said more of their current staff are negotiating their compensation this year.

"In an era defined by skills shortages, employers are witnessing a growing frequency of compensation negotiations, where the pursuit of talent meets the constraints of a squeezed marketplace," said Nicole Gorton, director at Robert Half, in a media release.

Non-financial benefits requested

Salary remained on top of the things that are discussed during negotiations, according to 44% of employers.

Gorton attributed this to the cost-of-living crisis that is pushing financial compensation on top of workers' priorities.

However, the survey also found that 22% of employers are seeing more non-monetary compensation talks, while 34% see negotiations for both monetary and non-monetary perks.

"While salary is still king, there is an uptick in professionals who want to amend their benefits to facilitate a greater sense of work-life harmony and options for professional development," Gorton said.

Unemployment driving negotiations

Robert Half's survey comes as Australia reported a 3.7% unemployment rate, slightly up from the historic low of 3.5% recorded months prior.

"As the demand for top talent continues to outgrow the available supply, organisations are finding themselves reconciling the requirements of their business with those of their employees too. They must entice and retain skilled professionals while navigating the constraints of budgets and company policies," Gorton said.

According to the director, compensation negotiations have become a critical tool for both employers and employees amid a tight labour market.

"Employers need to remember that a company's perk and benefit structure is reflective of their wider company culture," Gorton said. "Innovative and comprehensive offerings not only help attract and retain top talent, it can also support a long-term talent pipeline of employees and help build overall staff engagement."