Salary rises predicted to slow to 4.9%

SALARY growth rates across all business sectors are likely to slow significantly this year, according to a new survey published by PricewaterhouseCoopers.

The professional services and business advisory giant’s new Irish Salary Increase Trends survey has forecast that total base salary increases, across all sectors of Irish business, will be just under 4.9%. This would be down from the average 5.34% increase seen last year.

In terms of specific sectors, banking/financial services is likely to see the highest rise at around 5.58% this year; followed by the telecommunications/IT sector (4.74%) and the pharmaceutical/healthcare sector, which should see a salary rise of around 4.27% this year.

Of the survey’s respondents, only a quarter said their budgets for salary increases are larger this year than last year.

“It is widely recognised that for many sectors, payroll costs are the largest single cost borne by employers,” said Mary O’Hara a partner with PwC in its HR services department.

“Companies are under ever-increasing pressure to recruit, retain and motivate key talent, while all the time aligning these demands with budgetary and headroom restrictions.”

Meanwhile, small firms lobby group ISME yesterday called for a wide-ranging wage freeze to help the Government “get the economy back on track”.

The call came on the back of new figures showing more than 11,000 redundancies have been announced since the start of this year — a 27% increase on the same period in 2007.

“With 135 jobs a day being lost, it is imperative that sanity prevails, particularly when it comes to wage negotiations. The unions’ wage demands are in stark contrast with reality, which is that jobs are being lost at an increasingly frightening rate,” said ISME chief executive Mark Fielding.