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| IBEC Director General Danny McCoy (r) with his predecessor Turlough O'Sullivan.
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A new IBEC survey of 508 companies, which together employ over 86,000 employees, shows that the majority of Irish enterprises had pay freezes and reductions in staff numbers in 2009. Just over 20% of employers have implemented pay reductions. The IBEC Business Sentiment Survey (Q3) was carried out between 17-29 August 2009.
IBEC Director Brendan McGinty said: “It has been costing about 20% more to do business in Ireland than it has in countries with which we trade. Most people recognise that the survival of their enterprises and their jobs means that costs must be reduced. This is the new reality that has been accepted in many of the businesses which are set to survive.
“Since early 2009, IBEC has sought to reach common ground with the trade unions and with the government on how to keep businesses going in an effort to protect jobs. The world has moved on very far since then and there is still no sign of any national agreement which will deliver solutions to our problems of costs and competitiveness.
"At enterprise level most businesses and their staff are agreeing what needs to be done survive and keep jobs.The responsible course now is to recognise our new circumstances, to put jobs first and to stop pricing ourselves out of the market.
"Proposals published in June for the suspension of the private sector pay terms of the national agreement need to be formalised by IBEC and ICTU. This will give clear direction to the State dispute resolution bodies such as the Labour Relations Commission and the Labour Court, which should recognise the new norms. Clearly the agreement of a year ago is inappropriate and the honest course is for all to accept these new realities.”
The new IBEC Business Sentiment Survey found that:
More than half of companies (56%) have reduced their pay bill over the past 12 months by an average of 21%.
- Pay freezes (59%) and reduced numbers employed (55%) have been put in place in 2009
- Recruitment freezes (59%) and retraining of existing staff (45%) are among the most likely actions by employers in the next three months.
- A reduction in permanent staff is expected in 28% of companies and is under consideration in a further 42%.
- For 2010, half (48%) expect their pay bill to remain the same and one third (33%) expect it to decrease. The average expected decrease is 14%.
- A reduction in temporary numbers is expected in 32% of companies with 29% considering doing so.
- Short-time working is expected in 22% of companies, with a further 45% considering implementation.
- 31% of businesses intend to eliminate bonus payments and a further 29% intend reducing such payments.
