IBEC, the group that represents Irish business, today published the results of its latest pay survey, which found that about four out of ten (39%) employers expect to increase basic pay in 2013 and nearly six out of ten (58%) will freeze pay rates. 3% of employers say they plan to reduce pay in the coming year. IBEC said pay levels in Ireland are 16% above the eurozone average and pay expectations needed to reflect the very significant economic challenges the county still faced. The group warned that any increase in employment costs in the Budget would cost jobs and push struggling firms out of business.
Across all respondents the average expected change to basic pay rates in 2013 is projected at +0.62%, with pay increases being linked to improvements in productivity or major change. The results are based on a survey of 370 member companies.
IBEC Director Brendan McGinty said: "Pay expectations need to reflect economic realities. Most employers are still not in a position to award general pay increases and remain focused on regaining competitiveness and getting pay costs back in to line with our competitors. The ability of employers to sustain and create jobs must not be undermined in the pursuit of unrealistic pay claims.
"Encouragingly, 2012 labour cost estimates from Eurostat show that Ireland is heading in the right direction. Ireland is the ninth most expensive country in the EU 27, compared to fifth two years ago, but Irish labour costs are still 16% above the eurozone average.
"The Government must take decisive action to support growth and job creation in the Budget. Any increase in employment costs will make companies less likely to take on new staff and will push already struggling firms out of business. We desperately need to create new jobs; raising tax on work is the last thing we need."
On the proposal to introduce a statutory sick pay scheme, a recent IBEC survey revealed that, in addition to directly impacting the ability of companies to succeed and create jobs, many companies would be forced to change the existing benefits offered to staff. Of those companies with occupational sick schemes, the potential impact of a statutory sick pay scheme would result in:
- 76% of employers revising existing sick pay and benefit entitlements
- 38% reducing the duration of sick pay
- 38% reducing the level of payment to staff
- 24% changing the eligibility criteria for a sick pay scheme
"Putting additional social welfare costs onto employers is simply an extra tax on employment at a time when jobs should be the priority. Such a move would increase labour costs, reduce the capacity for companies to maintain and create jobs and damage hard-won competitiveness gains of recent years," concluded Mr McGinty.