Almost all small and medium-sized firms have implemented pay cuts or freezes since the start of 2009, according to Isme.
A new survey from the association shows that 49 per cent of SMEs have implemented pay freezes while 45 per cent have gone one step further and reduced have slashed wages with an average pay cut of 13 per cent.
The survey of 2,000 firms confirms that small and medium-sized firms are continuing to downsize with over a quarter of companies intending to make redundancies during the next three months.
In addition, 50 per cent of SMEs have reduced their working hours.
Commenting on the survey, Isme chief executive Mark Fielding said the figures confirm that many irish companies have had little option but to reduce their wages bills.
He called for a cut in labour costs across the economy, claiming that a reduction in the public sector wage bill is a necessity.
"We cannot wait for a new Benchmarking process, as recommended by An Bord Snip. The Government, as the employer, must act immediately and bring some semblance of reason to a situation where every euro of private sector taxation is being used to prop up the sheltered public sector,” said Mr Fielding.
"The Government must take a lead from the private sector and address its cost of labour. Not alone is it exorbitantly expensive and a drain on resources, but it also creates inequalities and inappropriate comparators for the private sector.
"A more efficient use of those resources would be the introduction of initiatives to maintain and increase total employment, including PRSI reductions and employment subsidies,” he added.
