Employees’ pay climbed 5% in 2003, salary survey shows

EMPLOYEES have seen their pay rise by 5% this year and can expect an average increase of 4.5% in 2004.

According to a new salary survey by PriceWaterhouseCoopers there has been a cut in the number of companies maintaining pay freezes and that employees in all sectors have seen their pay rise by 5% this year with further increases on the way next year.

The survey shows that most employees are receiving salary rises just below the terms of the Sustaining Progress national pay agreement. Under Sustaining Progress employees will get pay hikes of 7% over 18 months.

“The number of pay freezes were less, but overall the pay increases are reasonably modest, particularly when you compare them to Sustaining Progress. It is coming out slightly less generous than the national agreement and overall I think the pay increases are sensible and modest,” said Frances Leavy of PriceWaterhouseCoopers.

“What you could have expected, in the economic climate, is more companies operating a pay freeze. A lot of companies have taken their foot off the pedal, but are feeling a little bit more optimistic.”

The banking and financial services sector show the highest projected increase for 2004 of 5%, compared to 6% actually awarded for 2003. The telecoms and technology sector shows the lowest projected increase for 2004 of 3%, compared to 3.8% for 2003.

PWC said the difference between the banking sector and other industries was traditional and the gap to the hi-tech sector was normal, as IT firms tended to keep a tight reign on costs. PWC found that for continued future business viability and competitiveness, employers are seeking to minimise staff costs for 2004. Apart from budgeting for increased salary costs, businesses will also be faced with increased PRSI costs from January 1 on taxable employee benefits.

“For example if taxable benefits make up 10% of the total package the additional employer's PRSI will add around 1% to payroll costs. From February 1 some employers will also face payroll costs arising from a 10% rise in minimum wage,” PWC said.