Tech sector pay increases expected in 2015
A new survey of Irish businesses by employers group IBEC has found that more than half of Irish firms (57%) expect to increase pay in 2015.
The average expected rise is of the order of 2%, with the most likely sectors being medical devices (91%), pharma-chemical (89%), electronic services/telecoms (81%) and electronics manufacturing (87%).
“Pay will increase for most in 2015, but not all,” said Danny McCoy, CEO, IBEC. “The economy is recovering strongly, but we have a long way to go. The economy in money terms is still about 6% below its pre-crisis peak and overall price levels are below where they were in summer 2008. This needs to be reflected in pay expectations. Many companies remain in survival mode and simply cannot afford pay rises.
“It is vital that pay demands are moderate, so we don’t lose the hard fought competitive gains of recent years. The focus must be on job creation. This year we have the chance to further cut unemployment and attract back migrants that left during the crisis, but we must not repeat past mistakes. If costs spiral and we lose our competitive edge we will pay for it in jobs.”
Larger companies are more likely to be increasing basic pay in 2015, according to the survey. Three out of five companies with more than 50 employees expect to increase basic pay in 2015, compared with just over half (51%) of respondents with fewer than 50 employees.
“Despite welcome moves to reduce the income tax burden in the last budget, there is scope to do more,” said McCoy. “Ireland’s high marginal tax rate is still out of line with our competitors and remains a barrier to investment and job creation. It is a serious disincentive to work, taking a promotion or doing overtime. Further income tax cuts are needed over the coming years.”
The survey data was collected in November of 2014 in relation to companies’ pay expectations for 2014 and 2015, with 462 respondents.