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Four in ten employers to increase pay in 2013

Three quarters of companies with occupational sick pay schemes said the potential impact of a statutory scheme would result in a revision of existing sick pay and benefit entitlements.

Image: aldorado via Shutterstock

AROUND FOUR IN ten employers (39 per cent) expect to increase basic pay in 2013 and nearly six out of ten will freeze pay rates according to a new survey by IBEC.

Just 3 per cent of employers say they plan to reduce pay in the coming year according to the findings.

IBEC said pay levels in Ireland are 16 per cent above the eurozone average and pay expectations needed to reflect the very significant economic challenges the county still faced. The group warned that any increase in employment costs in the Budget would cost jobs and push struggling firms out of business.

Across all respondents the average expected change to basic pay rates in 2013 is projected at +0.62 per cent, with pay increases being linked to improvements in productivity or major change. The results are based on a survey of 370 member companies.

Commenting on the findings of the survey, IBEC Director Brendan McGinty said:

Pay expectations need to reflect economic realities. Most employers are still not in a position to award general pay increases and remain focused on regaining competitiveness and getting pay costs back in to line with our competitors. The ability of employers to sustain and create jobs must not be undermined in the pursuit of unrealistic pay claims.

McGinty said the government must now take decisive action to support growth and job creation in the Budget this week.

“Any increase in employment costs will make companies less likely to take on new staff and will push already struggling firms out of business,” he said. “We desperately need to create new jobs; raising tax on work is the last thing we need.”

Statuary sick pay

On the proposal to introduce a statutory sick pay scheme, in a recent IBEC survey companies said that, “in addition to directly impacting the ability of companies to succeed and create jobs, many companies would be forced to change the existing benefits offered to staff”.

Companies with occupational sick schemes said the potential impact of a statutory sick pay scheme would result in:

  • 76 per cent of employers revising existing sick pay and benefit entitlements
  • 38 per cent reducing the duration of sick pay
  • 38 per cent reducing the level of payment to staff
  • 24 per cent changing the eligibility criteria for a sick pay scheme

“Putting additional social welfare costs onto employers is simply an extra tax on employment at a time when jobs should be the priority,” McGinty said.

“Such a move would increase labour costs, reduce the capacity for companies to maintain and create jobs and damage hard-won competitiveness gains of recent years.”

Read: What should the government do about sick pay? Here’s three suggestions>

Read: In numbers: the PAC’s report on reviewing public allowances>

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