Monday 26 February 2018

Big freeze as 64pc of companies impose a pay pause

Anne-Marie Walsh Industry Correspondent

PAY freezes will continue next year for the vast majority of the country's 1.8 million workers.

The main private sector employer group IBEC has revealed that more than two-thirds of firms were planning pay pauses or wage cuts in 2012.

A pay freeze already exists across the public sector until 2014, although increments are still being paid.

IBEC's latest survey of more than 400 member companies revealed 64pc will keep pay levels unchanged next year. About 5pc expect to cut wages by about 10pc.

The revelations are slightly better news than its predictions for this year. Twelve months ago, 72pc of companies said they planned to freeze pay in 2011, while 7pc said they would reduce wages.

But more companies -- 27pc -- expect to increase pay next year, compared with 18pc in 2011, although the average increase will only be around 2pc.


IBEC director Brendan McGinty said employers were not in a position to give increases despite the fact that a quarter planned to take on more staff in the next three months.

"Companies remain focused on regaining competitiveness and getting pay costs back in to line with our trading partners," he said. "The minority of companies that will award pay rises will do so on an exceptional basis, typically on foot of significant productivity increases."

He said labour costs per employee here were 15pc higher than in EU countries.

Overall, the survey showed basic pay rates would rise slightly next year -- by just half a per cent -- compared with this year. The employers' group called for reform of pension rules to allow people to draw down up to 25pc of the value of additional voluntary contributions to their pension schemes, without penalties.

It pointed out that the value of the country's pension funds was €70bn.

IBEC also wants a new social welfare smart-card system to promote spending, as well as stamp duty and property tax incentives for first-time buyers.

Irish Independent

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