Pay rises are back on the agenda for 2015, as up to 57 per cent of companies plan to increase their employees’ salary levels this year, according to a study by the employers’ group Ibec.

About 42 per cent of the companies surveyed in November for Ibec’s HR Update said they would keep basic pay levels static during the coming year, with just 1 per cent budgeting for a decrease.

Where pay is expected to increase, the median rise is forecast to be about 2 per cent, similar to 2014.

Staff most likely to receive a boost to their basic pay are those working in medical devices, where 91 per cent of companies expect to give rises; the pharma and chemical industries (89 per cent); and electronic services and telecoms (81 per cent).

Larger firms

Larger companies are more likely to be planning pay increases this year, with 60 per cent among companies of more than 50 employees, versus a proportion of 51 per cent for smaller firms.

The survey found that there was an almost even 50/50 split between companies that increased wages and those who kept pay rates at existing levels in 2014.

The study also found that companies in traditional manufacturing were less likely to grant pay rises.

Ibec chief executive Danny McCoy warns that many companies “remain in survival mode” and cannot afford pay rises.

“Pay will increase for most in 2015, but not all. The economy in money terms is still about 6 per cent below its pre-crisis peak and overall price levels are below where they were in summer 2008.

“This needs to be reflected in pay expectations,” he said.

Mr McCoy said there is “no desire” for any national pay agreements for the “foreseeable future” and that wage rates would have to be controlled at enterprise level.

He also called on the Government to cut income taxes to boost the take-home pay of workers.

Income tax

“Despite welcome moves to reduce the income tax burden in the last budget, there is scope to do more.

“Ireland’s high marginal tax rate is still out of line with our competitors and remains a barrier to investment.

“Further income tax cuts are needed over the coming years,” he said.