Employers in the private sector anticipate increasing staff pay by an average of more than 4 per cent in 2024 despite the falling rate of inflation according to a new survey conducted by Industrial Relations News and the Chartered Institute of Personnel and Development (CIPD).
Ongoing challenges with recruitment and retention continue to influence pay rates in the private sector but also to drive the development of more progressive policies, according to CIPD director Mary Connaughton who presented the findings to IRN’s annual conference in Belfield on Thursday.
“It’s interesting to see that what is driving pay is very much around retention and more than the rate of inflation,” she said. “Employers realise both their rates of pay and their company practices have to be such that employees want to stay.”
The survey of around 200 employers, 80 per cent of them in services, suggested most companies are on course to pay more than they would previously have anticipated because of the continuing tightness of the labour market.
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Overall, the average anticipated increase in pay for 2024 was found to be 4.11 per cent with companies employing fewer than 50 people expecting to give slightly more than large firms but the difference is relatively small.
“What we also see is movement around the introduction of more progressive policies,” said Ms Connaughton. “We know companies are working on their culture and we see them working to try to have an impact on gender pay gaps and things like that. I think that’s showing us how important these issue have become and how important matching employee expectations is in the current environment.”
With the EU directive on adequate minimum wages due to be transposed into Irish law by November of this year, the survey included questions on companies’s attitudes towards collective bargaining, a key element of the measure.
Any increase in collective bargaining coverage must be through workers being represented by independent trade unions
— Greg Ennis
Of companies who do not currently engage with unions just 1 per cent indicated a willingness to engage in collective bargaining with them while 73 per cent do not want to.
Ibec’s Maeve McElwee said there was already a number of forums in which representatives of employers and employees engage positively on issues of policy and industrial relations and that many companies see value in having a union to deal with in relation to pay and conditions.
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But, she said, many domestic and multinational employers have also developed “really strong direct engagement models” and that these should not be undermined.
Brendan McGinty, formerly of Ibec now managing partner at Stratis Consulting said he was aware of a growing level of frustration among multinationals who say: “Well, hold on, if I am a decent employer, providing good terms [and] conditions, my pay is capable of being benchmarked with the best out there, why am I being potentially exposed to a further suite of rights whereby there will be a compulsion to engage with a trade union, albeit through good faith engagement, with whom I have no relationship whatsoever?”.
He said unions should not be surprised if there was pushback to the notion but Greg Ennis, deputy general secretary of Siptu said many employees were currently deprived of the trade union representation they want.
The directive, he said, would require the Government to promote hugely increased levels of collective bargaining which was “the only mechanism that provides for a fairer distribution of worker-generated profits”.
He said, “any increase in collective bargaining coverage must be through workers being represented by independent trade unions”.
Among the other speakers at the event was Tom Hayes, formerly a trade union official in Ireland but now executive director with Brussels-based employee relations consultancy Beerg, which advises many large multinationals.
He said that while companies have to take on board the fact that several pieces of legislation coming down the track will require greater levels of engagement with their employees, the notion that the minimum wage directive “changes things in a fundamental way is for the birds”.
He suggested large companies would easily adapt to the requirements and that unions would not greatly increase real levels of representation.
“I’m sure the legislation will change things on the margins but it’s not going to change the long-term sociological trends,” he said.
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