Remuneration expectations
In 2022, inflation rose to 8.3% in Ireland, causing a significant increase in the cost of living and a corresponding decrease in real income for the workforce. In response, many people are seeking pay increases to compensate for the effects of inflation. In a candidate-driven market, employers may need to negotiate more to retain top talent. Of those surveyed, 63% received a salary increase in the past year, with 49% being satisfied with the increase. The majority, 68%, received an increase of 1%-10%, but only 36% of this group were pleased with their raise. As expected, higher increases were more likely to result in satisfaction.
Employees are expecting a raise in 2023
Despite receiving a salary increase in 2022, 63% of employees consider requesting an increase in the next 12 months. Among those unhappy with their increase last year, the percentage considering a raise in the next 12 months is slightly higher, at 68%. As organisations may be anticipating a recession in 2023 and may be hesitant to increase salaries, it is important to consider the EU's economic outlook for Ireland over the next two years, which predicts a slow increase in unemployment but ongoing high inflation levels. Maintaining salaries in line with inflation will likely be the minimum expectation for retaining employees, and retaining top performers and attracting similar talent may require additional investment.
31% of employers report that retention is their primary reason for increasing salaries, while 22% see talent attraction as the primary reason. Despite the potential challenges of attracting talent in a recessionary market, 52% of organisations are increasing offers to new hires. In a candidate-driven market, competitive pay is essential for securing quality talent. Employers should be prepared for salary increase requests across the board, as most employees expect an increase of 11%-20%. Even those satisfied with their increase last year (60% of employees) will be looking for higher pay in the next 12 months.
