AIB promotion freeze lifted as 2,000 staff face redundancy
Chairman says move inevitable as company slims down
AIB intends to give pay rises to some of the staff remaining at the bank after it sheds 2,000 jobs over the next two years, it revealed yesterday.
At present the bank has a freeze on recruitment and promotions, but David Hodgkinson, the bank's executive chairman, said he wanted to see an end to this. "We need to start promoting people again,'' he said.
He admitted staff getting the promotions would be getting pay rises as they would be taking on more work. The bank also said it may need to pay more to attract new staff into certain skilled roles.
"This is an inevitable consequence of becoming a smaller and more efficient organisation. We want to be as fair as we can and will have consultation with staff representatives and associations. I envisage over 2,000 staff [will leave] . . . it's probably not widely known, 1,300 less people work for AIB than two years ago, a reduction achieved through natural attrition and management." He said the 2,000 redundancy figure did not include EBS staff.
Mr Hodgkinson said "market competitive'' salaries had to be paid to attract vital skills, particularly in the IT area. The former HSBC banker did not indicate whether bonuses needed to resume at the bank.
At present AIB is trying to recruit a new CEO and a government pay ceiling of €500,000 a year could cause a problem in recruiting people working in US or European banking.
It is understood the bank already has a shortlist of candidates, many of them with Irish backgrounds. Mr Hodgkinson said "very few'' of the potential candidates would be demanding salaries above the current ceiling.
AIB has halted all bonuses since the onset of the financial crisis, but the bank landed itself in controversy late last year when it was revealed it was going to pay deferred bonuses to staff.
Eventually the government decided to tax these bonuses at an effective rate of 90pc, using the universal social charges and PAYE. Many of the bank staff argued that the bonuses due had formed part of their everyday pay.
Other AIB staff also get commission, but these payments have also been halted since the start of the financial crisis. Commission payments are normally paid to sales staff and those selling financial products.