How to approach salary negotiations

Salary negotiations can often be delicate conversations that require tact and understanding. As an employer, it’s crucial to approach these discussions with fairness and transparency to achieve a mutually beneficial outcome. Recent changes to pay secrecy, allowing employees to disclose pay and workplace conditions[1], and a national minimum wage increase across all industries[2], could mean if these conversations aren’t already happening, they may not be far off. In this blog, we’ll explore some essential strategies to help employers navigate these discussions effectively, ensuring both parties feel heard and valued. 

  •  Know your stuff.

To ensure you’re best prepared for negotiations, you want to be totally prepared. This means being across your industry, it’s salary trends and standards, and the total compensation package you’re able and prepared to offer. Knowing this information can help employers explain how and why a salary is decided upon, and often lessens the need for extended negotiation

You should also consider factors relevant to the employee, such as their experience, skill set and performance. All these details will help form the basis of your position for the negotiations. And remember, after the changes to pay secrecy laws your employee will likely come armed with their own knowledge and expectations. 


  • Set a salary range

Before entering negotiations, establish a salary range that aligns with the position’s requirements and market value. Ideally, you want to provide a flexible range that allows for negotiation, while ensuring your lowest offer is still attractive to your employee. 

Setting a range ensures you can afford labour expenses, while also demonstrating you are committed to negotiating in good faith and are willing to hear your employee out. 


  • Be transparent

Transparency and honesty are fundamental principles of a successful salary negotiation. There’s no need for cloak-and-dagger tactics, as ideally you’re employing and working alongside the person you’re negotiating with. 

Being transparent and honest about how and why you’ve reached a salary and compensation package will leave both parties feeling better about the result. It’s also important to encourage either side to voice their feelings after the negotiation, to avoid complications in the future. 


  • Put people first

It’s important to remember that you’re dealing with a human being, someone with unique feelings, aspirations and challenges. Salary may not be the be-all and end-all in salary negotiations. If a pay rise isn’t feasible, you could consider adding other employment benefits. Leave benefits, flexible work arrangements, bonuses and company-supplied tangibles (think a car or a phone), can all help to reward an employee. 

You don’t want to short-change an employee, and you want your people to feel good about working for you. If you go into a negotiation with both best interests at heart, you should be able to secure a mutually beneficial deal. 


Effective salary negotiations require employers to balance industry standards and awards, transparency, and the well-being of their employees. Successful negotiations are not just about the final number; they are an opportunity to build trust, strengthen relationships, and cultivate a positive work environment that values and supports its employees. If you follow these steps when entering your next salary negotiation, everyone should leave happy. 

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[1] From 7 December 2022, employees and future employees have the right to share (or not share) information about their pay, employment terms and conditions that would be needed to be worked out their pay. They can also ask other employees about their salary, terms and conditions.

[2] Following the Fair Work Commission (FWC) Annual Wage Review 2022-23, the Australian national minimum wage has now increased to $23.23 per hour. This increase will come into effect from the first full pay period commencing on or after 1 July 2023.