Ireland has the eighth highest employment costs in the EU, according to a new survey by Mercer Human Resource consultants.
The highest annual employment costs which include salary, social insurance and pension contributions are borne by Belgium, Sweden and Germany, closely followed by Luxembourg and the UK. In contrast, Latvia and Lithuania have the lowest.
Belgium's average employment costs are as much as €53,577 while Latvia's are just €4,753. The average cost of employment across all EU states surveyed is €28,269 while Ireland's is €38,259.
Ms Lorna Byrne, of Mercer said the it is unsurprising that more companies are now moving their operations to Eastern Europe given the cost differential.
On average, employment costs in the EU are around 15 per cent less than in the US. But, taking Eastern EU countries out of the equation, costs in western EU countries are 23 per cent higher.
The survey also reveals that total benefit costs range from less than 10 per cent of national average pay to as much as 50 per cent. In Ireland, total benefits cost is approximately 27 per cent of national average pay.
The lowest benefit costs are in Denmark, the Netherlands, UK and Luxembourg reflecting these countries' ability to higher per capita output. At the other extreme, Greece, Belgium and France have the highest costs.
Pension costs will become an increasingly heavy burden in many countries where populations are ageing necessitating pension reform, the survey shows.
Ms Byrne said EU states are slowly moving towards an environment in which pan-European pensions can work, and these arrangements will help to reduce benefit delivery costs.
"But the refusal of some countries to offer tax advantages to non-domestic retirement plans remains a major stumbling block," she concluded.