It is no surprise that salaries in the sector have increased over the last year – the continued trend of a competitive market means employees hold the bargaining tools. Companies must remain competitive with pay packages to attract and retain talent. The cost-of-living crisis and inflation peaks have also added to this.
The Chartered Institute of Personnel Development (CIPD)-IRN Private Sector Report 2024 found that employee retention was the biggest
consideration impacting organisational pay policy, according to two-thirds of respondents. Other major factors were inflation and skills shortages.
Three-quarters of the 200 survey respondents reported that they increased basic pay in 2023, reflecting the pressure on pay and the tight labour market.
The average pay increase in the last 12 months was 4.38% – that is 0.76% higher than the increase companies had planned for 2023. Pay increases were just below the rate of inflation, as measured by the Consumer Price Index, which showed prices were 4.6% higher in December 2023 than in December 2022.
Director of CIPD Ireland Mary Connaughton
Projections for 2024
The same report showed over half of respondents are planning an increase in base pay, while 16% hope to maintain current rates. Organisations are projecting an average basic pay increase of 4.11% for 2024, according to CIPD.
“Unionised organisations are planning slightly smaller increases compared to their non-unionised counterparts – the difference is seen as a trade-off for the relative predictability of working in a business that recognises unions and where pay deals are agreed for longer than a year,” says Mary Connaughton, director CIPD.
Employee retention is the primary factor influencing pay policy for 65% of employers. Additionally, 54% of organisations identified inflation as a significant driver of pay decisions.
Respondents noted that pay increases would depend on overall pay trends, as well as the company’s performance and profitability. While individual performance affects the specific pay increases employees receive, general pay trends and company performance have become increasingly important considerations.
When dealing with these discussions, Mary advises organisations to consider the following factors:
• The fair distribution of any increase, not just the actual amount
• What increase was paid last year and how far employees have slipped behind due to the cost of living
• Consider non-pay benefits, such as tax-free vouchers. A voucher worth up to €1,000 means a lot more in employees’ hands than that amount in a pay increase. Also, it doesn’t add the pay cost to overheads.
Pay transparency directive
‘Salaries’ is a secret word that people don’t usually talk openly about. Over the next few years, that is going to change as new laws come into play around transparency and gender pay gap reporting.
Since the start of 2023, close to half of companies disclosed salary information in job posts – this has more than doubled since 2020.
Their reasons range from legal requirements to supporting pay equity and promoting pay transparency. On the other hand, many companies never share their pay ranges, arguing that doing so is potentially disastrous for employee-employer relations.
The Pay Transparency Directive will be implemented into Irish law in June 2026.
As part of a wider EU strategy, this directive is set out to enforce the principle of equal pay between men and women by eliminating pay secrecy; promoting transparency in pay setting and career progression; and strengthening enforcement mechanisms. There are three core measures provided for in the directive:
•Implementing public reporting measures (for larger companies)
• Creating new information rights (for everybody)
• Refreshing the concepts of the equal pay regime
Employers will have to provide information about salary levels or ranges in the job advertisement or before the interview, without the candidate having to ask for it.
Furthermore, employers will be prohibited from asking applicants about their pay history.
• The average pay increase in the last 12 months was 4.38%.
• In 2023, close to half of companies disclosed salary information in job posts—this has more than doubled since 2020.
• The Pay Transparency Directive will be implemented into Irish law in June 2026.
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It is no surprise that salaries in the sector have increased over the last year – the continued trend of a competitive market means employees hold the bargaining tools. Companies must remain competitive with pay packages to attract and retain talent. The cost-of-living crisis and inflation peaks have also added to this.
The Chartered Institute of Personnel Development (CIPD)-IRN Private Sector Report 2024 found that employee retention was the biggest
consideration impacting organisational pay policy, according to two-thirds of respondents. Other major factors were inflation and skills shortages.
Three-quarters of the 200 survey respondents reported that they increased basic pay in 2023, reflecting the pressure on pay and the tight labour market.
The average pay increase in the last 12 months was 4.38% – that is 0.76% higher than the increase companies had planned for 2023. Pay increases were just below the rate of inflation, as measured by the Consumer Price Index, which showed prices were 4.6% higher in December 2023 than in December 2022.
Director of CIPD Ireland Mary Connaughton
Projections for 2024
The same report showed over half of respondents are planning an increase in base pay, while 16% hope to maintain current rates. Organisations are projecting an average basic pay increase of 4.11% for 2024, according to CIPD.
“Unionised organisations are planning slightly smaller increases compared to their non-unionised counterparts – the difference is seen as a trade-off for the relative predictability of working in a business that recognises unions and where pay deals are agreed for longer than a year,” says Mary Connaughton, director CIPD.
Employee retention is the primary factor influencing pay policy for 65% of employers. Additionally, 54% of organisations identified inflation as a significant driver of pay decisions.
Respondents noted that pay increases would depend on overall pay trends, as well as the company’s performance and profitability. While individual performance affects the specific pay increases employees receive, general pay trends and company performance have become increasingly important considerations.
When dealing with these discussions, Mary advises organisations to consider the following factors:
• The fair distribution of any increase, not just the actual amount
• What increase was paid last year and how far employees have slipped behind due to the cost of living
• Consider non-pay benefits, such as tax-free vouchers. A voucher worth up to €1,000 means a lot more in employees’ hands than that amount in a pay increase. Also, it doesn’t add the pay cost to overheads.
Pay transparency directive
‘Salaries’ is a secret word that people don’t usually talk openly about. Over the next few years, that is going to change as new laws come into play around transparency and gender pay gap reporting.
Since the start of 2023, close to half of companies disclosed salary information in job posts – this has more than doubled since 2020.
Their reasons range from legal requirements to supporting pay equity and promoting pay transparency. On the other hand, many companies never share their pay ranges, arguing that doing so is potentially disastrous for employee-employer relations.
The Pay Transparency Directive will be implemented into Irish law in June 2026.
As part of a wider EU strategy, this directive is set out to enforce the principle of equal pay between men and women by eliminating pay secrecy; promoting transparency in pay setting and career progression; and strengthening enforcement mechanisms. There are three core measures provided for in the directive:
•Implementing public reporting measures (for larger companies)
• Creating new information rights (for everybody)
• Refreshing the concepts of the equal pay regime
Employers will have to provide information about salary levels or ranges in the job advertisement or before the interview, without the candidate having to ask for it.
Furthermore, employers will be prohibited from asking applicants about their pay history.
• The average pay increase in the last 12 months was 4.38%.
• In 2023, close to half of companies disclosed salary information in job posts—this has more than doubled since 2020.
• The Pay Transparency Directive will be implemented into Irish law in June 2026.
Read more
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