Irish companies prepare to increase salaries by 2.5% this year

PwC survey of human resources leaders finds skills shortages from IT to finance

The Republic’s unemployment rate fell to 7.2 per cent in December, according to the Central Statistics Office, compared to a high of 15.1 per cent in 2012. Photograph: iStockphoto

The Republic’s unemployment rate fell to 7.2 per cent in December, according to the Central Statistics Office, compared to a high of 15.1 per cent in 2012. Photograph: iStockphoto

 

Irish companies are preparing to increase workers’ pay by about 2.5 per cent this year as they struggle to fill positions in information technology, data analytics, risk and finance, according to a new report.

PwC’s 2017 Irish HR Directors’ Survey, published on Monday, found that 77 per cent of the country’s human resources leaders are experiencing skills gaps, up from 61 per cent last year, representing a key threat to business growth.

Still, only 45 per cent are to increase headcount in 2017, substantially below the figure of 75 per cent of respondents a year ago, which suggests that companies are focusing more on retention and adding to the skills of existing employees.

“With the high costs of replacing key individuals, it is important that companies really focus on ensuring they identify their key talent, engage with them and reward them appropriately,” said Gerard McDonough, a director with the people and organisation department in PwC.

The report’s salaries increase projection is in line with the Central Bank’s current estimate for 2017. The bank said in a report, published in October, that annualised wage inflation had averaged 1.5 per cent since the beginning of 2015, indicating that there continues to be “slack” in the labour market, even as the decline in the unemployment rate has slowed.

The Republic’s unemployment rate fell to 7.2 per cent in December, according to the Central Statistics Office, compared to a high of 15.1 per cent in 2012.

Meanwhile, the PwC survey found that more than two-thirds of human resources leaders were concerned about what Brexit means for employee mobility between the European Union and the UK.

“For Irish employers looking to source key talent, this represents an opportunity to make Ireland a more attractive location for EU nationals,” PwC said.