Salaries are continuing to rise; that’s according to data released by the Central Statistics Office (CSO) in February. According to the data, average weekly earnings now stand at €783.62, an increase of 3.5% on the previous year. This follows on from an increase of 3.3% in 2018.
Research carried out on behalf of Adare Human Resource Management for its HR Barometer 2019 also backs up the CSO’s findings. Three quarters (75%) of organisations stated they had increased salaries last year by an average of 4% and half of the organisations we spoke with plan to increase salaries in 2020 and nearly one in four (38%) were unsure of plans to bump salaries.
The CSO figures also point to an increase in the average hourly rate, up from €23.33 in Q4 2018 to €24.17 in Q4 2019; 140% more than the minimum wage of €10.10 and 96% more than the living wage of €12.30.
Needless to say, there are significant variations in earnings across sectors with the highest average weekly earnings of €1,241.42 in the Information and communication sector, followed by the Financial, insurance and real estate activities sector at €1,115.02 while the lowest average weekly earnings were €381.50 in the Accommodation and food service activities sector.
But what does this tell us other than salaries are on the increase and it’s an employees’ market?
With staff retention and recruitment, the top two HR priorities for 2020, salaries are an obvious solution. Thirty percent of organisations surveyed for the HR Barometer stated that increasing salaries was the top initiative taken to improve employee retention in 2019. But pay shouldn’t be looked at in isolation as a silver bullet; it should be part of an approach looking at total reward, albeit an important one, particularly given the current annual average cost of living for a family somewhere between €50,000 and €60,000 depending on the sources.
New world of work
Flexible working arrangements (28%), social events (22%) and employee engagement initiatives (19%) all featured highly in terms of steps organisations are taking to help improve retention. This provides a clear indication that the traditional world of working is changing and fast.
Led by a greater emphasis on work life balance, the “new world” of working places greater value on a holistic view of the employer employee relationship. There have been numerous studies done to highlight increased productivity when the employee feels they, and their personal time, is valued.
But there must be a clear understanding of where the boundaries lie; employers cannot expect employees to answer calls or emails outside of agreed working hours, regardless of how “flexible” the arrangements are. There must be mutual agreement to how the process works and this must be respected by both parties.
At Adare Human Resource Management, we have been working with a broad range of clients who have put flexible working arrangements in place. It’s important that these arrangements work for everyone, are monitored, analysed and measured to ensure outputs are not hindered; organisations have a commercial reality after all.
However, our experiences have been that when the balance is right, everyone benefits.