Slowdown in salaries as companies cut raises

SALARIES are stabilising, a new survey suggests, with most workers receiving only moderate increases this year.

And many companies did not offer any wage increases at all in the first six months of 2003.

The sectors benefiting the most are pharmaceutical, finance, insurance, real estate, retail, restaurants and hotels.

In a majority of cases, the increases were between 1% and 5%.

However, in an estimated 48% of companies, salaries remained unchanged this year.

The survey, conducted by the management skills and solutions services company Manpower SkillsGroup, almost mirrored the recent findings of a survey by the Small Firms Association (SFA).

Wages increased generally by 6% in 2002, but under the new national partnership agreement, 7% is expected to be achieved over 18 months.

However, SFA director Pat Delaney warned of significant wage moderation in the immediate future.

It was important, he said, that a downward trend in inflation was continued, after a period of rising inflation and spiralling wage costs.

Manpower SkillsGroup managing director Jason Kennedy said that while salary increases were prevalent, the degree of the increase was somewhat stabilising.

“The latest deluge of redundancies in the wake of the global slowdown has enabled employers to readily find staff at competitive salaries, due to the greater pool of candidates,” he said.

Conducted across 11 industrial sectors, a total of 650 companies were surveyed. Almost 50% of companies reported salary increases, with 48% confirming that salaries remaining unchanged.

However, the remaining 2% of companies reduced salaries.

The survey showed that in companies which upped wages, 58% increased salaries between 1% and 5%, 36% reported a hike of between six and 20%, and a tiny fraction exceeded 20%.

But the higher salary increase was mainly in the retail sector where existing wages were low.

Meanwhile, the survey also discovered that only 9% of companies did not offer benefit incentives to employees. The most popular incentives offered, in 60% of businesses, were expenses and car parking, while 25% provided pension schemes and education subsidies, long term service awards and health insurance.