75% of companies plan to increase basic pay next year
In advance of Ibec's HR Leadership Summit in Croke Park today, Ibec published its latest HR Update, which includes the results of a comprehensive new pay survey. The survey found that 75% of companies plan to increase basic pay next year, 2018; the median pay increase is set to be 2%, similar to the last four years. This year 75% of companies will award pay increases, a figure revised upwards from 71% at the start of the year. Pay awards in 2017 remained consistent with trends in recent years, with a median increase of 2.2%.
Ibec cautioned that a significant number of companies are not expecting to increase pay but said that, due to continuing record low inflation together with income tax cuts, the economy as a whole is going through a period of strong real wage growth. This needs to be reflected in pay expectations.
Speaking in advance of the Summit, Ibec Director of Employer Relations Maeve McElwee said: "Significant numbers of workers in 2018, will again see increases in pay and changes in the taxation system reflected in their pay packets. The income tax changes which Ibec welcomed in the budget reduces the burden on average income earners and will help businesses to attract and retain talent. The focus must remain on competitiveness and job creation. With 43% of companies planning to increase staff numbers next year, and 67% of those roles being permanent, it is critical that costs do not undermine competitiveness.
"It is encouraging to see the confidence in a strong and growing labour market with unemployment now back to 6.1% this year. It’s crucial that we stay on this positive path and don’t jeopardise these very real and important successes. Most companies are in a position to award modest pay rises, but many face significant and heightened uncertainty as a result of Brexit and currency pressures. This needs to be reflected in wage expectations."
Overview of survey results:
• 75% of respondents expect basic pay rates in their company to increase next year, 2018
• 75% of companies increased basic pay this year, 2017, a figure revised upwards from 71% at the start of the year
• The median pay increase for 2017 is 2%, similar to levels reported in the last four years
• The total pay bill in 2018 is expected to increase in 71% of companies, 2% ahead of this year (69%). This is due to pay rises and new hires
• Increases in basic pay and total pay bill is most likely in companies in the high-tech sector and in larger companies (84% of high-tech manufacturing firms plan to increase basic pay in 2018)
• Increases in basic pay and total pay bill are least likely in SMEs (60% of companies with less than 50 employees will increase basic pay in 2018) and in the services sector (69%)
• 43% of companies plan to increase staff numbers in 2018