White collar workers in Ireland received pay increases averaging 4 per cent in recent months but will still be worse off by around €1,300 between now and the end of the year if the high rates of inflation persist, new research suggests.
The findings come from global recruitment consultancy Robert Walters annual Salary Survey Guide 2023 – which tracks salary predictions for the coming year, as well as surveying 2,000 white collar professionals and 1,000 employers to identify upcoming workplace trends.
It found that three quarters of white collar firms had given pay rises in January - the highest percentage recorded in the last decade - most employers said they had acted to cover the dramatic increase in the cost of living.
While cost of living considerations may well be front-of-mind for employers, the survey suggests that the average pay increase of around 4 per cent lags behind the current rate of inflation in Ireland which stood at 8.2 per cent at the end of 2022, although it has fallen back slightly since then.
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That means for an Irish professional earning €44,202 annually – the average increase equates to an extra €76 per month after tax - a figure which falls considerably short of the cost-of-living.
With grocery price inflation in the 12 weeks to January 23rd topping 16 per cent leaving Irish households facing shopping bills of more than Є1,000 and energy price jumping by around Є80 per month, most workers will remain substantially worse off than they were.
By current pay increase standards, the average white collar worker is Є1,300 worse off in 2023 despite the record number of pay rises.
“Historically pay rises have been used as a metric to reward hard work, loyalty, or progression. However, what this survey reveals is how truly unique the market is at the moment - where pay rises are now being awarded out of necessity by employers who are fearful of not appearing as a responsible or ethical employer,” said the managing director of Robert Walters Suzanne Feeney.
She added that it has been “extremely difficult” for employers to match salaries with the volatile rate of inflation and said that as prices “continue to soar, it isn’t surprising that professionals are beginning to cast their sights onto new positions – in the hopes that the grass will be greener”.
Ms Feeney noted that while it might be tempting for some to “jump at the offer of an inflated salary at another company, we do advise professionals to approach this decision with caution. What goes up will come down, and employees paid above market rate are often the first to be looked at when cost saving measures come in”.
