Talking about salaries has long been a difficult subject in many workplaces, but as employees become more informed and confident in their worth, pay negotiations are becoming a crucial part of career growth. In New Zealand, salary expectations are evolving alongside broader trends in pay transparency and cost-of-living concerns.

Despite employees being more vocal about fair pay, not every salary discussion ends with the desired outcome. Research indicates that while many workers are pushing for higher pay, only a fraction successfully secure the raise they request. In some cases, employers cite budget limitations, while in others, performance expectations may not align with an employee’s request.

So, what happens when an employee doesn’t get the pay rise they were hoping for? How should they respond, and what are the best next steps to take? In a recent conversation, Shannon Barlow, NZ Managing Director at Frog Recruitment, shared insights on handling salary negotiations, overcoming setbacks, and positioning oneself for future success.

"A rejected pay rise doesn’t mean the conversation is over"

During the discussion, Barlow highlighted that employees should approach pay negotiations with preparation and an understanding of broader market trends. She noted that many professionals go into these conversations feeling confident in their request but may not always have a clear strategy for dealing with a "no."

"A rejected pay rise doesn’t mean the conversation is over—it means there’s an opportunity to explore why, understand what’s needed, and build a path forward," Barlow explained.

One of the key takeaways from the discussion was the importance of framing the conversation as an ongoing dialogue rather than a one-off request. If an employer denies a pay increase, employees should seek clarity on the reasoning. Is it due to company-wide financial constraints? Does the business require specific performance improvements before granting a raise? Understanding the employer’s perspective can help in planning the next steps.

Barlow also discussed the importance of timing and preparation, emphasising that successful negotiations are built on data, performance evidence, and a proactive approach.

"Walking into a salary discussion with market research and clear examples of your contributions strengthens your case and demonstrates why the raise is justified," she said.

What to do if your pay rise request is declined

If an employee’s request for a salary increase is denied, there are several constructive ways to respond:

1. Seek Constructive Feedback
Understanding why the request was declined is crucial. Employers may highlight areas where improvement is needed, or they might suggest a timeline for revisiting the discussion. Taking this feedback seriously and working on the suggested areas can improve the chances of a successful negotiation in the future.

2. Explore Non-Monetary Benefits
While salary is a key factor in job satisfaction, other benefits can contribute to overall compensation. If a raise isn’t possible, employees should consider negotiating for additional perks such as:

• Extra annual leave
• Flexible working arrangements
• Professional development opportunities
• Performance-based bonuses

These benefits can provide value while keeping the conversation open for a future pay review.

3. Set Clear Performance Goals
A structured approach to career development can help employees work towards a future salary increase. Establishing clear performance goals with management and regularly checking in on progress can demonstrate commitment and make future negotiations smoother.

4. Consider Market Positioning
If a pay rise is denied, employees should research salary benchmarks for their role and industry. If their current pay is significantly below market rates, they can use this data in future discussions. This also helps in evaluating whether seeking opportunities elsewhere might be necessary.

5. Keep the Conversation Open

A single "no" doesn’t mean that a raise is permanently off the table. Employees should schedule a follow-up discussion in a few months, demonstrating progress and revisiting the conversation when conditions might be more favourable.