How to negotiate a promotion

How to negotiate a promotion

Life’s everyday expenses can stack up quickly and if your current wage isn’t cutting it, you could find your savings account diminishing quickly — and that’s where negotiating for a promotion can come in handy.

Australia’s unemployment rate dropped in July, according to Roy Morgan Research.

“In July Australian unemployment fell to 1.265 million Australians (10.2 percent, down 0.4 percent since June) and under-employment fell to 1.079 million (8.7 percent, down 0.8 percent). This is the first time unemployment has fallen in July since 2009,” said Gary Morgan, Roy Morgan Research Executive Chairman. 

“However, despite a fall in unemployment being good news, there was also a substantial contraction in the Australian workforce,” Morgan noted.

Get ahead by stepping up

While unemployment rates have dropped, workforce contraction may still keep Australians on their toes.

For those looking to rise through the ranks at work, there are some tips to keep in mind. With promotions come more responsibility and potentially a pay rise — great news if you’ve been relying on your credit cards a bit too much.

In order to get ahead, you have to step up. You need to be proactive and make your intentions to advance known to key decision makers. Staying silent in the hope a promotion might fall into your lap is nothing more than wishful thinking.

Ask at the right time

While it’s important to take initiative and express your wishes to accelerate your career, you need to ask for a promotion at the right time.

Attempting to negotiate a promotion when your boss is in crisis mode, clients are playing havoc or employees have just been laid off is not the smartest move. 

Consider your particular workplace, too. In some cases, promotions may be considered at quarterly or six-monthly intervals. In other instances, the timeframes for getting promoted may be more fluid. 

Either way, be sure to ask in the appropriate setting, when your boss or human resources manager will be receptive to your request. Ask for a meeting so you can explain your point of view without being interrupted. 

Take on challenges

If you want to be seriously considered for a promotion, you’ll need to demonstrate your ability to take on a bigger workload, trickier clients or more risk, whatever industry you may be in. Perhaps you want to shift into a managerial role, in which case your interaction with other staff members will be highly relevant.

Take on challenges when you’re gearing up for a promotion to show you can handle extra responsibility, and demonstrate instances of where you’ve achieved good results.

Offering tangible evidence of your achievements will give your boss better reason to consider promoting you.

Consider counter-offers

The role you desire might be offered to someone else. While this is disappointing, don’t consider your attempts to get promoted futile.

If you’re given a counter-offer — for instance, the ability to move into a new role or get a promotion review in three months’ time, don’t turn down such an offer.

By considering counter-offers, you’re showing flexibility.

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Learn more about savings accounts

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.

How can I get a $4000 loan approved?

While personal loans and medium amount loans don’t offer guaranteed approval, there are steps you can take to help increase the likelihood of your application being approved, including:

  • Fulfilling the eligibility criteria (providing ID, proof of residency, proof of income etc.)
  • Checking your credit history (you can order one free copy of your credit file per year, and make sure that there aren’t any errors that may be bringing down your credit score)
  • Comparing carefully before applying (making multiple loan applications can mean having your credit checked multiple times, which can look bad to some lenders and reduce your chances of being approved by them)

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly.