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IRISH EMPLOYERS’ GROUP IBEC has warned that any expectations of widespread pay rises over the next 12 months are unrealistic.
Despite recent data suggesting some companies will start hiring in 2012, pay rises are not likely, the group said today following the release of its new pay survey.
In fact, 74 per cent of companies will either freeze or reduce pay rates in the coming year, said IBEC.
Pay expectations need to reflect current economic realities; pay rises in 2012 are unrealistic.”
The less-than-optimistic survey also claimed that Budget 2012 decisions to reduce the redundancy rebate and abolish employers PRSI relief on pensions will add to inflation this year, leading to increased labour costs and damaged competitiveness.
“Job protection and creation remains the priority for most businesses,” said IBEC director Brendan McGinty. “This means pay restraint nationally and an unwavering focus by Government on restoring competitiveness. Companies are focused on getting costs back in line with our trading partners. This is vital if we are to restore our economic fortunes.”
About 69 per cent of firms surveyed intend to apply a pay freeze during the year, while 5 per cent will be aiming to reduce their employees’ basic pay.
However there is good news for some employees as about one quarter of the 400 firms surveyed expect to increase basic pay rates by an average of 2 per cent.
The majority of those companies expect improved productivity, increased workforce flexibility and new product/service development.
EU data has shown that Ireland’s hourly labour costs dropped 1.1 per cent last year – the only Member State to show a decrease. However, wage levels remain about 15 per cent higher than the average in the EU15, noted IBEC.
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Ah sure if ibec had their way, we would all be working for nothing.
Actually if the incessant IBEC PR machine is to be believed “ sure your lucky to have a job” then you would be paying to stay in work…. On hang on with all the new taxes, household charges etc you already are.
IBEC and ISME….Every day you have ISME Chief Executive moaning about the cost of paying staff…..No fear the directors and Chief Executive of both these bodies dropping their wages
Would you rather be working for 10% less at the business that currently employs you or have it go bust because they couldn’t get their costs down and you ultimately getting nothing? Serious question, would you rather 90% of what you were previously earning or 0% (ignoring social welfare for the sake of argument)?
Because as it stands, there are a lot of laws that forbid the favourable option from above being carried out, thanks to our social partnership days. No one is saying that we should go back to the 1800′s Britain or slavery, but a bit of common sense is needed.
Neither the trade unions or the employers’ organisations should be completely running the show.
@Glynn
Well it’s kind of difficult to argue with IBEC’s line there, we are in a bit of a crisis here if you haven’t noticed.
@Martin
A lot easier to drop the directors’ salaries when they’re not unionised or protected by social partnership laws. The reason they “moan” is because in the case of a lot of their workers, it is in fact illegal.
3 businesses going to the wall every day last year paints it’s own picture, keeping as many people working as possible should be the priority. Ibec are right on this one
Irish ferries ring a bell .
Seamus irish ferries that is the exception. Can you not realise if business don’t make a decent profit them they go out of business and sack all their staff.
Apart from ESB, Bord Gais and BnM (and a very few other minor items/companies) every single other cent in this country is generated by private firms.
Think of it this way, a private firm not only pays the wages of its staff but contributes to the wages of public sector works, pensioners, dole dependants, children, etc…
This is not a bashing public sector rather than pro business, and in fact it’s possible to be pro business and pro public sector at the same time.
COMPETITIVENE$$
It’s hard to be competitive when you have high rates of pay, raw product and transport Is to expensive. Apart from that the retail giants are really ripping us off. One product that costs €2.38 to produce and deliver and has a retail price of €11.99. I am not going to give the product name or company. My wife works for the company and if identified retail company could refuse to deal with her company and would put 60 jobs at risk.
So they want wages to come down but the cost of transport,food and esb all going up.IBEC should cop on.People lucky enough to be working are now the working poor and cant make ends meet.
The cost of transport,Esb and food should be going down but when our goverment allow price rises on tolls and transport we know were on a loseing battle with enda and co.Enda will you spare me a penney for my bills.
So maybe government, which owns the ESB (highest paid electricity workers in the world), CIE (per passenger KM costs 4x higher than Scotland), sets the VAT rate and is imposing all round higher charges ought to take a slim pill?
@torpedo your post in regards pay is disingenuous to say the least. Pay has always been the red herring in the room and you know it.what about costs in running your business????.
As i said it’s my wife’s job not my company so I don’t know the running cost. She is paid €13:25 an hour and is looked after very well by her bosses. The factory does not want to punish the staff who work very hard to get there job done.
I agree seamus…You never hear IBEC or ISME complaining about the high cost of electricity,transport,tolls,insurance,rates, their salaries etc etc .I cannot remember when Mark Fielding last actually focussed on the elephant in the room the high costs other than labour that are contributing to the overall barrier to doing business.ibec and isme take the easy route blame the wages of the people employed and not the high costs inposed by government and local authorities….Never ceases to amaze me when ibec and isme go on about sunday premium rates yet across europe they dont have this problem as they dont open on a sunday..
You’re wrong there @Martin.
In the past they’ve gone on about the transport network, electricity costs, broadband speeds in the West, upward-only rent contracts (think that might be the preserve of ISME more than IBEC), defence of the corporation tax rate from Europe… And a pile of others that escape me at this minute.
Fact is there a lobby group and if they didn’t lobby effectively on all the issues affecting their members, their elected leaders would be removed and replaced with those who would. Just like a Trade Union.
Unfair to misrepresent the organisation that represents over 800,000 jobs as the evil bogey man out to eat your payslip.
Guts of the rant over, but since when do businesses not open on Sunday? It’s not the fucking 50′s any more!
It’s this simple, if a company can afford to pay more it generally will! I know I’m going to get thumbs down for this but it’s true.
A company’s aim is to make profit, it does this by getting its staff ( by pay) to produce a product or service, add on non wage cost, add on a mark up and resell the product or service. So if a company want to make more profit in the long term only way is to produce more of the product or service, to do this it needs more staff. If it needs more staff it will have to pay above the industry sector to attract staff from other firms. So companies want to pay staff more as it means they are expanding.
Reality most firms are decreasing wages as they are producing less of their product or service. Which means they are shrinking and producing less profit.
I will never comment on the Journal again if anyone can find me 10 Irish companies from 2010 that reduced staff pay (average of all pay) while increasing both their profit and turnover, excluding business which the government invested in.
@Jay when times are good, companies will pay more , are you having a laugh. When times were good in manufacturing ,opposite was the case , in fact foreign cheap labour was brought in to undermine the already poorly paid workforce in manufacturing up and down this country.
Eh, “Towards 2016″ ring a bell? “Program for Prosperity and Fairness”? JLC’s maybe?? We were massively overpaid, and still are in a lot of sectors. We pushed up the costs in this country, we caused “Rip-off Ireland” and now we’re dealing with the consequences of a weak FF government pandering to SIPTU/ICTU and poor lobbying by IBEC/ISME when our goods are too fucking expensive for anyone in their right mind to buy them abroad.
Like it or not, we’re an uncompetitive economy and we need to sort that out urgently.
The gap between profits and pay is at its greatest for fifty years in the US. If multinationals milking the most out of Ireland’s tax haven offerings claim they cannot pay more, the domestic business sector most certainly can’t.
The only reason there won’t be pay-rises is because IBEC regularly sends letters to businesses instructing them not to give pay rises to their employees.
@muc beag I dont know what planet you are living on. Get your facts right right first before printing.The program for for prosperity did nothing for the lowest paid in this country. Only those earning a decent wage benfitted. Such as teachers , gardai etc.It was common practice for workers before the JLC came in to be exploited, working well over the legal working limit, and not being paid for it.. Days in lieu was the scam they pulled, which staff never got. Also at present there is cowboy employers esp the hotel sector who are pulling the same scam again.It is very easy to hit the vulnerable our society. Rather than go after the 585 multi millionare tax dodgers that reside out of this country. Or banks who pay very little tax. IBEC my friend also targeted student nurses pay, as above Irish Ferries debacle.Plus allowing the use of cheap foreign labour. competive with whom ???? China.??.
Earth. Planet Earth. Specifically Ireland. But let me give you some facts about the world which I inhabit (not sure I can say the same for you).
You inhabit the same world as China, therefore you compete with them. Like it or not. Restricting fundamental EU rights of everyone from outside Ireland just so you can remain overpaid isn’t going to happen, my “friend”.
The tax intake from low-paid workers would be higher than the tax from the spurious number you quoted up there (according to ICTU, it was 14), simply because there are so many of them. Therefore, they are a priority. A lot of these millionaires (technically) live abroad too, and it’s very difficult to force them to declare residency without violating their human rights and/or EU law – and that would be a ridiculously dangerous precedent to set for everyone else in this country.
Also, learn the difference between “tax avoidance” and “tax evasion”. Former is legal, latter is not. People making use of loopholes for the purposes of tax avoidance is the fault of those who wrote those laws, i.e. the Oireachtas. Lobby them, I’m sure they do care about revenue lost here (not being sarcastic).
A worker should be allowed work for as long as he/she likes, provided they’re not being coerced into it. We don’t need a Nanny State to tell us what we can and can’t do.
Irish Ferries – one company. One solitary company. Can you name another? Well I can quote a statistic of 3 business per day going under last year, citing labour costs. 3(365), if you have a calculator handy do the sums there, it’s not a pretty sight. One things for certain though – 3(365) > 1.
Whatever about the PPF, T2016 (agreed in 2007, just before we hit that economic iceberg) was the final nail in the coffin of our competitiveness. There’s no arguing with that, I know myself first hand.
Open your mind, Seamus. The world isn’t exactly as described by your Trade Union masters.
So, in short, you’re wrong.
Ps I am not a member of any union, as I probably would be sacked. But what effectively is IBEC an employers union. A bit of a paradox don’t you think.
One does suggest you study modern Irish history, where you will find that during the seventies and eighties a certain amount of Irish business were up to their neck in tax evasion, by and large helped by the banks, who themselves pay fuck all in tax.
You probably were not around during that time judging by posts above.
Good day to you sir.
Your last paragraph calling me a racist, shows in fact what an ignorant right wing nob you actually are. Never in any of my quotes did I attack foreign workers.My ire has always always been at your chums in IBEC who basically said it was ok to bring foreign workers in on contracts with lower wages and inferior working conditions…Which in turn has led to racism in the long term.
I suggest you should go to specsavers and then read my posts again mate.
When you start resorting to cheap shots and spurious accusations mate, you basically showed what you are.It is because of you and your chums in IBEC people like myself and every foreign worker in this country have been exploited forced to work long hours only to be short changed in our wages every week.
People like you and your chums in IBEC will eventually, be hanging from lamp posts in this country mate.
Finally calling me a begrudger ???, when you and your dispicable ilk would deny a man or woman, foriegn or not a decent wage so they can live with dignity goes to show what you really are. As I said you and your ilk will eventually hang mate.
first and foremost ,your figures are in fact wildly inaccurate. those figures came from the government. second of all your arguement is self serving, and offers nothing but the usual ,right wing rhetoric, that has come out of America since the eighties, blame the unions for the lack of competition, when in fact, what is really going on ,is the complete destruction of the union movement globally to allow market forces and pure greed rule. maybe you should read my posts again, nurses pay , who lobbied the government there, only your ibec chums. who lobbied the government to bring cheap labour on lower wages, again your chums in ibec ,which in turn has led to an increase in racism. Finally as Winston Churchill one said about capitilism .The vice of capitilism is its unequal sharing of its blessings. and you only have look America and according to the un the highest rates of poverty in the developed world,and steadly getting worse.
The two figures I quoted? OK then, allow me to provide my rebuttal before I stop bothering with some ignorant union devotee.
The number of millionaires who didn’t pay tax – got that number from ICTU’s chief economist Paul Sweeney. If I’m wrong, then the people that decide what your opinion is going to be, i.e. your union masters, are wrong.
3(365) [as in 3 {number of companies that went under last year} multiplied by 365 {number of days in the year}] – number quoted from above comment, also something I’ve heard frequently.
I’m not going to bother debating with you any more because frankly, no one takes your opinion seriously. Especially seeing as you can’t construct a paragraph or any form of structured argument. You say the same things over and over, regardless of what responses have proved your claims wrong. You’re extremely narrow-minded, with the standard Irish “begrudge those who have it better than me” mentality, no matter whether they’ve earned it lawfully or not. You’re racist towards migrant workers with the South Park “They took our jobs!” attitude, yet blame the migrant workers themselves for your own attitude.
Generally speaking, I find your attitudes disgusting.
I suggest you get back into education.
Private consumption is still contracting, and won’t make even 1% annual gains until 2014.
How, pray tell, are a majority of businesses that serve the domestic private market expected to provide pay increases when their segments of the economy are still contracting?
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