- 3 in 4 white-collar firms have given pay rises in January – record number in 10 years
- Over half of employers admit to giving pay rises for cost-of-living purposes
- Average of 4% pay increases means that professionals will be €1.3k worse off if inflation continues at current rate
- Almost half (47%) of Irish professionals will be looking for a new position this year, now that January pay review is complete
- Benefits packages predicted to increase as pay rises fall short
Over three quarters (75%) of professional services firms have reported that they gave their employers a pay rise this January – with the average increase being around 4%.
The leading reasons for pay rises according to managers has been;
- To support employees with cost of living (51%)
- To aid morale and retention (42%)
- For a promotion, time served, or targets had been met (31%)
The findings come from global recruitment consultancy Robert Walters annual Salary Survey Guide 2023 – which tracks salary predictions for the coming year, as well as surveying 2,000 white collar professionals and 1,000 employers to identify upcoming workplace trends.
Suzanne Feeney, Country Manager at Robert Walters Ireland comments:
“Historically pay rises have been used as a metric to reward hard work, loyalty, or progression. However, what this survey reveals is how truly unique the market is at the moment - where pay rises are now are being awarded out of necessity by employers who are fearful of not appearing as a responsible or ethical employer.”
Pay-rises fall short as everyday prices soar
Whilst cost of living may well be front-of-mind for employers, the Robert Walters Salary Survey Guide reveals that the average pay increase of around 4% lags behind the current rate of inflation in Ireland which is 8.2% at the end of 2022.
That means for an Irish professional earning €44,202 annually – a 4% pay increase equates to an extra €76 per month after tax- an increase that falls considerably short of the cost-of-living.
In fact according to recent data from Kantar, grocery price inflation in the 12 weeks to January 23 hit 16.3% - meaning that Irish households could face a Є1,000+ annual increase to their shopping bill (approx. Є96 per month).
Energy price increases (according to Electric Ireland) equate to an additional Є37.20 for electricity and Є42.99 for gas per month – an increase to bills of around Є80 per month.
By current pay increase standards, the average white collar worker is Є1.3k worse off in 2023 despite a record number of pay rises.
Professionals are not confident about future
Further findings from Robert Walters Salary Survey point to the inability of pay-rises to match-up with rates of inflation triggering a general lack of confidence.
Only 35% of Irish professionals feel confident about opportunities within their sector - but this is not dampening motivation, with half (47%) of workers planning to look for a new position in 2023 now that their January pay review is out complete.
Suzanne Feeney adds: “It has been extremely difficult for employers to match salaries with the volatile rate of inflation. As prices continue to soar, it isn’t surprising that professionals are beginning to cast their sights onto new positions – in the hopes that the grass will be greener.
“Whilst it is tempting to jump at the offer of an inflated salary at another company we do advise professionals to approach this decision with caution. What goes up will come down, and employees paid above market rate are often the first to be looked at when cost saving measures come in.
“My initial advice would be to have an open and honest conversation with your employer. If the pay increase is below par then this more than likely is because the balance sheet of the company is also not where it needs to be.
“However there are ways around this – and companies are more than willing to invest back into employees if they show loyalty. With the ongoing global skills shortage, we are seeing more companies level up their training programmes to help upskill people from within the business. Adding more strings to your bow is a much more stable way of securing a long-term pay increase, rather than sideways steps to other competitors.”
Companies compensating with benefits
Three quarters of employers have admitted to being ‘concerned’ about losing primary staff who have received below inflationary pay increases.
To help counter this, employers have increased investment back into workplace culture, the office interior and soft benefits – with the Robert Walters Market Intelligence Team predicting that the value of soft benefits packages will increase yet again this year.
Top soft benefit perks include:
- Private Health Insurance
- Medical & Mental Health Assessments
- Travel Insurance
- Social Events
- Training Subsidiaries
- Gym Memberships
- Extended holidays / sabbatical schemes
- Mortgage allowance
- Student loan repayment
- Enhanced parental leave
- Car allowance
- Travel / commuting subsidiaries
Click here to download a copy of the 2023 Robert Walters Salary Survey Guide.
