Amid rising inflation and increasing job responsibilities, Australian workers are facing greater challenges in securing salary increases. According to the Robert Half 2025 Salary Guide, 72% of employees say it has become more difficult to negotiate a pay rise compared to the previous year, while only 23% believe it has become easier.

The report highlights a growing disconnect between employee expectations and employer constraints. Nearly half (49%) of employers acknowledge that candidates are now more demanding about salary than they were a year ago. However, businesses remain cautious about pay hikes due to ongoing budget pressures and cost management concerns.

“Our 2025 Salary Guide paints a picture of the complex salary dynamics that will shape the job market this year,” said Nicole Gorton, director at Robert Half. “Employers continue to face budget constraints while employees, who have not had significant pay rises during recent economic turbulence, are pushing harder for financial stability.”

Why Employees Want a Raise

The survey identifies key reasons employees are requesting salary increases. The top motivations include:

• Exceeding performance goals (36%) – Employees who have consistently delivered results feel they deserve financial recognition.

• Rising cost of living (32%) – Many workers believe their salaries should keep pace with inflation and higher expenses.

• Increased responsibilities (32%) – Taking on new projects or heavier workloads is another primary driver for pay demands.

• Acquiring new skills (29%) – Employees who have upskilled or gained new qualifications want their pay to reflect their added value.

• Seeking a promotion (27%) – Some employees are aiming for higher-paying roles within their organizations.

• Long periods without a raise (15%) – Those who haven’t received a pay increase in years are now pushing for better compensation.

• Perceived unfair pay (9%) – Some workers feel they are underpaid compared to market standards.

• Annual raise expectations (9%) – A small percentage expect a salary increase every year as standard practice.

Employer Approach to Salary Increases

On the employer side, Robert Half’s report reveals the primary reasons organizations grant pay raises:

• Performance-based merit (30%) – Raises are most commonly awarded to employees who meet or exceed performance targets.

• Standardized evaluations (26%) – Many companies assess all employees on uniform criteria to determine salary increases.

• Market competitiveness (19%) – Some employers adjust pay to stay aligned with market rates and retain skilled talent.

• Retention (18%) – Businesses recognize that keeping existing employees is often more cost-effective than hiring replacements.

• Employee tenure (6%) – A small fraction of employers factor in tenure when considering salary adjustments.

As salary negotiations become more complex, employees and employers alike must navigate a shifting economic landscape. With inflationary pressures continuing to impact household budgets, the push for fair compensation is expected to remain a critical issue in Australia’s job market throughout 2025.