Ibec says 39% of firms plan for pay to increase in 2013

Almost 40 per cent of Irish employers expect to increase basic pay next year, the employer’s organisation Ibec has said, with just 3 per cent indicating they plan to reduce pay.

However, it has warned that most employers were still not in a position to award general pay increases and remained focused on regaining competitiveness.

Ibec said pay levels in Ireland were 16 per cent above the euro zone average and pay expectations needed to reflect the very significant economic challenges the State still faced.

The lobby group said its latest pay survey of member companies found that 39 per cent expected to increase basic pay in 2013. It said nearly six out of 10 – 58 per cent – of employers would freeze pay next year while 3 per cent said they planned to reduce pay.

The figures are little changed from a similar Ibec survey this year.

The employers’ group maintains that any increase in employment costs in the budget will cost jobs and push struggling firms out of business.

“Pay expectations need to reflect economic realities,” Ibec director Brendan McGinty said. “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.

“The ability of employers to sustain and create jobs must not be undermined in the pursuit of unrealistic pay claims.

“Encouragingly, 2012 labour cost estimates from Eurostat show Ireland is heading in the right direction. Ireland is the ninth most expensive country in the EU 27, compared to fifth two years ago, but Irish labour costs are still 16 per cent above the euro zone average.”

He said the Government “must take decisive action to support growth and job creation in the budget”.

Any increase in employment costs would make companies less likely to take on new staff and would push already struggling firms out of business.

“We desperately need to create new jobs; raising tax on work is the last thing we need,” Mr McGinty added.

On the proposal to introduce a statutory sick pay scheme which would involve employers contributing to the cost of sick pay for staff out of work due to ill health, Ibec said a recent survey revealed that, in addition to directly affecting the ability of companies to succeed and create jobs, many companies would be forced to change the existing benefits offered to staff.

It said that of those companies with occupational sick schemes, the potential impact of a statutory sick pay scheme would result in:

* 76 per cent of employers revising existing sick pay and benefit entitlements;

* 38 per cent reducing the duration of sick pay;

* 38 per cent reducing the level of payment to staff;

* 24 per cent changing the eligibility criteria for a sick pay scheme.