Most Irish companies are planning to deliver pay rises in 2017

Just under three-quarters of businesses expect to pay staff more, according to an Ibec survey.

By Paul O'Donoghue

ALMOST THREE-QUARTERS of Irish companies are planning to award pay rises next year, a new study has found.

That is according to employers group Ibec, which polled just under 400 of its members. It found that 71% of companies plan to increase basic pay in 2017. The median pay increase is set to be 2%, similar to levels reported over the last three years.

This year the business group expects just under two-thirds of companies to award pay increases, a figure revised downwards from 71% at the start of the year and 69% in April. Pay awards in 2016 remained relatively modest, with a median increase of 2.2%.

Increases in basic pay and total pay bill is most likely in companies in the high-tech sector and in larger companies. 88% of high-tech manufacturing firms plan to increase basic pay in 2017.

Conversely, increases in basic pay and total pay bill are least likely in SMEs, as just three-fifths of companies with less than 50 employees plan to increase their employee’s basic pay in 2017.

Two-fifths of companies surveyed plan to increase staff numbers in 2017.

ibec pay 2016 No companies polled cut wages in 2016
Source: Ibec

Companies classed as in ‘high-tech manufacturing’ sectors were found to be most likely to award pay rises, with four-fifths planning to increase their staff’s basic income.

On the other hand people working in the services sector are much less likely to be greeted by a bolstered pay packet in the new year, as just 55% of companies in that industry are planning to increase pay.

Positive trends

Ibec said that a “significant number of companies still cannot afford pay rises” but added that, due to low inflation, “the economy as a whole is going through a period of strong real wage growth”.

The business group’s director of employer relations, Maeve McElwee, said that most workers “will see positive economic trends reflected in their pay packets next year”.

However, she added: “We must not lose the hard fought competitive gains of recent years. We’re heading firmly in the right direction, and unemployment is likely to fall below 8% this year.

“The focus must remain on job creation, especially given the heightened uncertainty that Brexit and currency pressures present.

“Most companies are in a position to award modest pay rises, but not all are growing at the same rate and some parts of the country are lagging behind. This needs to be reflected in wage expectations.”

Some 29% of respondents expect basic pay rates to stay the same in 2017. Some 392 companies were polled for the study. Of those, three quarters employed 249 people or less. Roughly 15% had between 250 and 499 employees, while the rest of the respondents had more than 500 staff.