Average pay up just €8 a week after price hikes - new report
Inflation knocks over €10 off weekly salary increases
The average Irish salary is set to rise by just €8 a week this year after increases in the cost of living are factored in, according to a major American consultancy firm.
Wages will rise by €19 a week during the year for the average worker who earns €740 a week, according to Korn Ferry.
But it forecast that inflation will knock over €10.86 off the increase.
The predicted increase of 2.5pc in wages would therefore only represent a real hike of 1.1pc due to an expected 1.4pc hike in the cost of living.
Korn Ferry said the increase in wages here this year will be a significant slowdown on last year, but still be higher than increases in the UK, France, Italy and Germany.
Global General Manager for Pay, Ben Frost, said despite continued economic uncertainty the outlook for Ireland remains positive.
“Salaries continued to grow through 2018 and are expected to rise at a faster rate than many other developed economies,” he said.
“Salaries are an important part of a company’s rewards strategy. And while inflation indices are a solid benchmark for reviewing market trends in pay, we recommend that employers take a broader perspective by defining and agreeing upon their own measures of cost drivers, business strategy and local trading conditions.
He said “compensation programmes” need to be regularly reviewed to “make sure they align with changing business and market conditions.”
While the figures reflect a drop of under 1pc on last year’s wage growth, they remain above the global average of 1pc.
The predicted growth in Irish wages significantly outperforms the UK, Italy, France and the US.
However, pay packets after inflation will grow at a higher rate in China, Poland and Russia than Ireland, according to Korn Ferry’s salary forecast.
Korn Ferry’s salary forecast assesses the data of more than 20 million workers in 25,000 organisations in 110 countries.