Pay rises back on the agenda as nearly 75% of employers signal boost

After six years of widespread pay cuts and freezes, a study suggests that things may be looking up for the Irish workers and their wage packets.

Almost three-quarters of employers expect to give at least some of their staff pay increases this year, according to the survey by PricewaterhouseCoopers (PwC).

According to the firm’s 2014 Reward Trend Snapshot, typical increases this year will be about 2 per cent, with up to 73 per cent of businesses surveyed planning to boost their employees’ pay.

About 75 per cent of businesses are also planning increases for 2015, with typical increases mooted at about 2.2 per cent.

A third of businesses surveyed said they were also reviewing their performance related pay incentive plans, with almost 90 per cent of those looking at increasing bonuses.

None of the businesses surveyed said they were planning company-wide pay cuts of the type that were commonplace throughout the most acute years of the financial crisis from 2008 to 2011.

The methodology for calculating pay increases is based primarily on analysing company performance, with 79 per cent citing this as the main influencing factor. External measurements are also being factored in, with 40 per cent also tracking the consumer price index to help set new pay rates.

Senior management, professionals and executives are more likely to see a boost to their take-home pay than line workers, however.

'Modest level'
Between 67 per cent and 73 per cent of businesses are planning increases for higher grades, while just 57 per cent will boost pay for staff who are paid by the hour for production-type roles.

“As pay increases are at a modest level, it is a challenge for organisations to recognise top performers.

"Our survey indicates that to address this issue companies are enhancing their performance related pay plans, [and] annual bonus schemes in particular," said Jenny Smyth, a senior manager in PwC's reward advisory division.