IBEC urges pay restraint

The largest employers' group in the country is warning workers not to expect pay rises for the next three years.

The largest employers' group in the country is warning workers not to expect pay rises for the next three years.

IBEC is expected to urge pay restraint at a conference to company chiefs this morning when it outlines its pay policy for the future.

The warning comes after a new national pay survey which revealed that most of the groups members plan to freeze pay, while 6% will slash wages next year.

The group said that any expectations of pay rises before 2013 were unrealistic and said it was advising employers not to entertain any claims for pay increases in 2011 or 2012, given that wage levels remain significantly out of line with many of our key trading partners.

Speaking in advance of the IBEC HR Summit, IBEC director Brendan McGinty said: "Ireland is under unprecedented international scrutiny.

"Now more than ever we need to demonstrate that we can take the resolute action required to get our labour costs back into line. While some progress has been made, our economic recovery, which is being led by the traded sector, will not take hold without fully pricing ourselves back into international markets."

The group said its new survey on pay found that the majority of companies were still not in a position to award pay increases this year or next.

The IBEC national pay survey of 467 companies shows that the total pay bill of companies fell by 2.9% this year.

Some seven out of 10 enterprises had pay freezes and 13% reduced basic rates by an average of 11%.

Half of all companies expect no change to their pay bill in 2011, nearly two thirds (62%) will freeze basic rates, while a further 6% expect to reduce basic pay rates by an average of 9.5%.

Across all respondents the average expected change to basic pay rates in 2011 is zero.

"Our priority must be to keep companies in business and improve competitiveness; this is the only way to protect jobs," said Mr McGinty.

" An extended period of pay restraint in the economy is required. The lack of jobs is the single biggest issue facing our economy, but only competitive businesses can sustain and create employment."

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