Pay

Pressure on the labour market is evident by that fact that 83% of respondents increased basic pay rates in the last 12 months, even though only 51% of last year’s respondents had planned that 12 months ago. Increases in pay were most common in SME organisations with 50–249 employees (90%), similar to the level of unionised employers who increased base pay.

The rate of pay increase in the last 12 months was 5.06%, which is below the rate of inflation. Lower increases were paid in large organisations, unionised organisations and in the manufacturing sector. A trend that has been identified in previous surveys continued, with slightly fewer non-union organisations making a pay increase, but giving a higher increase at 6.50% than unionised organisations (where the average increase was 3.68%). Interestingly, organisations with 50–249 employees made a larger base pay increase (6.15%) than either larger or smaller companies.

In the next 12 months, 40% of respondents are already planning for a base pay increase, while 22% plan to maintain pay at current rates and 38% have yet to decide. More unionised companies, at 64%, plan a pay increase, as well those with 50–249 employees (50%).

The planned average increase in base pay for the next 12 months is 3.62%, though non-union companies expect to pay 4.78% (versus 3.11% by unionised companies) and small companies with under 50 employees plan to pay 4.67% (versus 3.60% by those employing 50–249 and 3.42% by those with over 250 employees).

When calculating basic pay increases, non-unionised companies considered:

• individual performance (67%)
• company performance in Ireland (59%)
• pay trends in other non-union companies (38%),
• and parent company performance (28%).

Bonus payments are being planned for 2023 in three-quarters of the respondents, similar to 2022. This year, 37% of respondent companies will have a bonus available to all employees and a similar percentage will have bonuses only available to some groups of employees .

Collective bargaining

For 2023, wage pressure caused half of respondent organisations to revisit existing pay agreements (45%) and pay higher than planned basic pay increase (42%). In this survey, 42% respondent organisations engaged with a trade union for collective bargaining purposes, of which two-thirds had a preference for pay agreements of 18 months or more. Only 4% of non-union companies would consider engaging with a trade union for collective bargaining. Overall, only 16% of all respondents would consider non-union collective bargaining, despite findings from the Irish Government’s High-Level Group on Collective Bargaining.  

Non-pay benefits

The pressure on employee retention was evident. Many respondents (72%) reported that they were maintaining or increasing non-pay benefits. Paid sick leave (90%), pension contribution (83%) and maternity top up (69%) were the most popular benefits. 64% of respondents also reported that they were utilising tax-free vouchers (Budget 2023 increased the small benefit exemption amount from €500 per annum to €1,000).

The impact of the housing crisis was reported as causing medium to high levels of impact on pay, employee wellbeing and recruiting employees. The housing shortage has also led to increased pressure on organisations to provide flexible work, with 41% reporting a high demand for hybrid/remote working. Interestingly, 9% of respondents said that they were now offering housing assistance as part of their benefit packages.

Policies 

Regarding employee supportive policies, the response was positive. Close to half of respondents reported that they were already implementing or considering implementing a miscarriage policy and over half were implementing or considering menopause policies or benefits. A third of respondents are actively considering or implementing menstrual health policies. Under half of respondents were not considering domestic abuse leave policies. The entitlement to domestic abuse leave is expected to be introduced in Autumn 2023, as per the Work Life Balance and Miscellaneous Provisions Act 2023, so we would expect to see a change in these figures over the coming months.

Legislative impacts 

The introduction of gender pay gap (GPG) reporting highlights more focus on an inclusive culture in 41% of respondent organisations. Other significant changes are seen in job descriptions and recruitment practices (36%), learning and development (26%), reward and recognition (21%) and changes in leader and manager behaviours . 
 

The impact of new laws such as the Protected Disclosures Amendment Act (2022), Sick Leave Act (2022), GPG Reporting (practical effect 2022) and Work Life Balance Directive (2023) was ranked from medium to none by an overwhelming majority of respondent companies. As organisations have more time to become compliant with these new legislative requirements, we would hope to see a leap in these figures. Of note, 51% of respondents have changed probationary periods due to the EU Directive on Transparent and Predictable Working Conditions.  In relation to the upcoming EU Directive on Pay Transparency, respondents were most concerned about job ads and average pay.  

Focus for HR

Looking forward to the next 12 months, most private sector HR professionals (68%) believe that investing in company culture is the biggest issue to be faced, followed by the demand to work remotely (43%) and employees wanting to work outside Ireland (34%).