Irish workers to feel the pinch as pay rises fail to meet inflation

Irish workers may start to feel the pinch in 2023 as pay rises fail to keep pace with inflation, a new survey has found.

The research, from people management platform HRLocker, found salaries are set to rise 5.2 per cent, below the current rate of inflation of 8.2 per cent. The survey, which questioned 380 private sector executives, found 88 per cent plan to increase pay, with 28 per cent planning for a 5 per cent hike and 21 per cent planning to match inflation.

The inflation crisis was credited for the decision to increase wages by 90 per cent of respondents, and two thirds said it was down to the skills shortage.

“Pay rises are critical for employers to remain competitive. If employees are struggling to make ends meet, they’ll vote with their feet, which can have huge, long-term consequences for businesses,” said Adam Coleman, CEO at HRLocker.

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“That said, money isn’t the only thing that matters. Employers need to identify other means of keeping their employers motivated and engaged, such as flexible working, additional leave and a clear career path. Above all, clear and honest communication is essential.”

Employers were also less optimistic than before about the coming 12 months, as affordability issues, falling demand for products and services, and rising interest rates were blamed for the dip in sentiment.

A previous HRLocker survey of 960 full-time employees found more than half have been affected by the cost of living crisis and a quarter have had to take on another job to make money.