Thursday 21 June 2018

More pay rise demands as job numbers grow

Pay hikes, housing and living costs weigh on workers' minds for 2018, writes Samantha McCaughren

Wages in the financial services sector, along with IT, are rising higher than in other areas. Photo: claudine van massenhove
Wages in the financial services sector, along with IT, are rising higher than in other areas. Photo: claudine van massenhove
Samantha McCaughren

Samantha McCaughren

Almost three-quarter of Irish workers expect their wages to increase in 2018, according to wide-ranging new research among employees and employers.

Close to half of the workers (48pc) anticipating a rise in 2018 are expecting a rise of less than 5pc, but a sizeable chunk (37pc) are predicting a pay increase of between 5pc and 10pc on their 2017 salaries.

Most people received modest raises in 2017 - less than 5pc, according to the Abrivia Recruitment/TCD Salary, Employment and Economic Trends Survey.

Last year one in four respondents saw their wages stay the same between 2016 and 2017. Reflecting the move towards full employment in the Irish economy, only 8pc experienced a reduction in wages in 2017.

However, wages in technology and finance are rising more quickly than in other areas.

Job numbers continue to grow, and seven in 10 firms expanded their staff numbers in 2017. While some firms had dramatic expansions, most increased their numbers by 10pc to 20pc in 2017.

In the year ahead, 85pc of firms expect to hire new employees across all levels of the firm. As in 2017, the expansion is to be between 10pc and 20pc of the overall size of the firm.

Donal O'Brien, managing director, Abrivia Recruitment, said: "Some 85pc of employers surveyed plan to take on new staff in 2018, with salaries in IT and Finance pulling far ahead of other sectors."

The research also found that Irish professionals are coming home in greater numbers, with 56pc of companies overall reporting they had hired returning Irish nationals in 2017, up from 47pc in 2016. It was most pronounced in the finance and banking sector, where 71pc said they had hired returning workers.

Several salary trends were identified in the research.

- It found that wage increases in accountancy, industry and commerce would "become the norm". Chief financial officers (CFO) can expect salaries of up to €180,000 if based in large Dublin companies. New trainee accountants could earn up to €30,000.

- CFOs in smaller companies (employing less than 500 people) could earn up to €140,000 in Dublin and between €70,000 and €100,000 and the regions.

- The report said "2018 is trending to be a bumper year for recruitment across all areas of financial services".

- A CFO in financial services would be expected to earn between €100,000 and €170,000 in Dublin and up to €145,000 in the regions.

- Banking and financial services can expect "an increase in salaries and competition for skilled staff".

- Human resources will have another strong year, with HR directors able to command salaries of €180,000 in Dublin.

- Insurance has seen a marked increase in the recruitment of analysts across the reinsurance and captive markets, with a particular focus on data analysis.

- A head of underwriting can earn up to €150,000 whether based in Dublin or in the regions.

- The report said that due to a shortage IT talent, "salaries and day rates have continued to increase across most sectors".

- A chief technology officer can expect to earn up to €170,000 and €160,000 in the regions.

The shortage of rental accommodation was highlighted in the report, with 47pc of employers saying that it was impacting on their ability to hire staff, up from 40pc in the previous survey.

The cost of purchasing a home continues to impact workers, with 37pc citing it as a major issue in recruiting staff in 2017, up from 27pc in 2016.

The price of working in Dublin is considered very high, and 44pc of employees would accept a cut between 4 and 10pc if they were to relocate jobs to live outside Dublin.

Those that are offered the prospect of relocation to Dublin for employment find the prospect much more unappealing, with 12pc outright refusing and 46pc looking for a pay increase of more than 20pc to relocate.

Some 8pc of respondents are still residing in the family home, and 20pc of those do so to save a deposit on a house; an additional 13pc do so due to not being able to afford rent.

Those paying rent experienced an average increase of 14pc since 2016. In terms of the impact on their disposable income, the average is 31pc, which is at the outside of what is considered affordable.

The study focused part of its research on Brexit but found employees and employers are not excessively concerned about the implications overall.

However, the pharmaceutical sector and sales and marketing are very worried about the impact on their business models.

Dr Na Fu, Trinity Business School associate professor in Human Resource Management, noted that most employers found millennials the most difficult to manage.

On the other side of the coin, millennials perceive that their workload as highest but also perceive their job impact as lowest when compared to Baby Boomers and members of Generation X.

Sunday Indo Business

Business Newsletter

Read the leading stories from the world of Business.

Also in Business