Ibec Publishes its Pay Trends Report

• 85% of respondents increased basic pay by an average of 4.1% in 2024 while 84% of employers are planning to increase pay in 2025
• The average increase across all business sectors forecast by respondents for 2025 is 3.4%
• Average increase in overall headcount in workplaces is predicted to taper off from a peak 9.4% in 2024 back to 7.2% in 2025

Ibec, the group representing Irish businesses, has published the first part of its annual HR Workplace and Trends report today focusing on pay and resourcing. The survey, conducted with over 400 Senior HR Professionals, reveals that 84% of businesses are planning to increase pay in 2025, with respondents forecasting an average increase of 3.4% across all business sectors.

The report also indicates that businesses in Ireland had an average staff turnover rate of 8.3% in 2024, down slightly from 9.7% in 2023. Additionally, 41% of respondent companies plan to increase their headcount in 2025. However, the average increase in overall headcount is expected to decline from a peak of 9.4% in 2024 to 7.2% in 2025. The primary drivers of additional headcount are increased production/demand, business expansion, and building the future supply of talent in their workplaces.

The sectors that saw the largest pay increases were Tourism and Retail, reflecting changes in the minimum wage. Meanwhile, 23% of smaller businesses (with fewer than 50 employees) outside of the hospitality sector will not increase salaries in 2025.

Maeve McElwee, Ibec's Executive Director of Employer Relations, commented:

"Through our engagement with employers, we are observing the effects of a tight labour market, as businesses strive to retain and attract talent in a highly competitive environment. Despite easing inflation, wages are expected to continue rising, following trends seen in recent years. This is largely driven by changes in the minimum wage and increased competition for talent.

While hiring may be slowing due to higher operating costs, recruitment challenges, and slower global growth, skills shortages in certain areas are likely to persist. Employers—and Ireland as a whole—must continue to innovate in strengthening the talent pipeline. This includes expanding workforce accessibility by supporting those with additional caregiving responsibilities, ensuring that Ireland remains an attractive place to live and work without being constrained by inadequate public investment, and focusing on upskilling to manage the impact of digitisation and AI on our economy.

In this context, the recent announcement by An Taoiseach, Simon Harris TD, regarding plans to unlock the National Training Fund to accelerate our economy’s transition will help us stay agile in an increasingly complex and changing world.

There is also an opportunity to support workers who are employed but wish to work more hours. The decline in average weekly hours worked per employee—currently 31 hours, down from a high of 34.7 hours at the peak of the Celtic Tiger—should be reviewed to ensure that those who want to work more are not unfairly penalised by the potential loss of additional benefits."

The Ibec HR Leadership Summit on Wednesday, 23 October. Explore the future of HR. Book your place now at  https://www.ibec.ie/connect-and-learn/events/upcoming-events/2024/ibec-hr-leadership-summit-2024/general-details  .