The majority of Irish workers face fresh pay cuts and pay freezes in 2012 according to a new survey by IBEC – the Irish Business and Employers Confederation.

Research conducted by IBEC amongst 400 of its members has revealed that pay rates will be further affected by the recession this year.

Some IBEC companies do expert to hire staff in 2012 but the vast majority will be forced to cut pay or, at best, freeze it as the economic crisis deepens.

Many IBEC members also highlighted the fact that Irish wages were ‘significantly higher’ than other EU countries last year.


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IBEC director Brendan McGinty said: “Job protection and creation remains the priority for most businesses. This means pay restraint and an unwavering focus by government on restoring competitiveness.

“Companies are focused on getting costs back in line with our trading partners. This is vital if we are to restore our economic fortunes.”

According to the Irish Independent, the latest IBEC survey found that more than two thirds of companies, 69 per cent, intend to apply a pay freeze for this year with about five per cent expected to reduce rates of pay.
More than half of Irish companies, 58 per cent, expect improved productivity in 2012 and 65 per cent anticipate new product or service development.

Less than half, 48 per cent, expected increased flexibility in workforces.

“Many companies operating in the domestic economy are still struggling to survive,” added McGinty. “Alongside the current plan for austerity we need a clear strategy to grow the economy and to sustain jobs.

“Ireland has lost 300,000 jobs over the last four years and we have a shockingly high unemployment rate. This is where our efforts must focus.”

The IBEC survey also claimed that Irish wage levels remain about 15 per cent higher than the rest of the EU, excluding the accession states.

Thanks to inflation and recent Budget changes by the government, IBEC members contend that labor costs are likely to increase and undermine efforts to regain competitiveness.