| 3.5°C Dublin

40pc of firms will give workers a pay rise next year

FOUR out of 10 firms expect to give staff a pay rise next year, and just three out of every 100 managers are anticipating cutting wages, according to a survey by employers' group IBEC.

It's a rare piece of good news for the vast majority of workers, who can now expect pay to be unchanged or higher at the end of next year.

However, IBEC warned that wages here are still 16pc above the eurozone average, and said that any increases must be sustainable.

The results of the pay survey published today found that 39pc of employers expect to increase basic pay rates in 2013, while 58pc will freeze rates and just 3pc of employers plan to reduce staff pay.

The expected increases are linked to improvements in productivity. The findings are based on a survey of 370 companies.

"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," said IBEC director Brendan McGinty.

He said the ability of employers to sustain and create jobs must not be undermined in the pursuit of "unrealistic" pay claims.

Last week, new figures from the Central Statistics Office (CSO) showed there was a modest overall gain in wages in the three months to the end of September, the third quarter in a row to record a gain.

Skills shortage

Pay remains below 2008 levels and wage increases are likely to be focused on the most active sectors, including technology, where a global skills shortage is helping boost earnings and causing some concern for employers.

Business Newsletter

Read the leading stories from the world of business.

This field is required

Wages have been boosted by global multinationals, including Google, IBM and Microsoft, all competing for a relatively small pool of qualified staff.

Basic pay rates are just one part of the equation in terms of household income. Workers in Ireland have experienced sharp declines in their spending power since 2008 as a result of wage cuts, lost overtime and bonuses and tax increases.

Confirmation that wages are stabilising, or even set to increase, comes just ahead of this week's Budget.

Many are bracing themselves for the worst, anticipating being hit with new and higher taxes as the Government tries to close the gap between spending and the tax take.

Where wage rises do happen, they are expected to be modest. Next year, the average rise in basic pay is expected to be less than 1pc.

Ireland is now the ninth-most-expensive country in the European Union, down from fifth two years ago.

Meanwhile, IBEC has warned against proposals to introduce statutory employer-funded sick- pay schemes,.

"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," said Mr McGinty.

Most Watched