This PwC Reward Trends Snapshot Survey 2014 provides data on actual and forecast salary movements for 2013, 2014 and 2015 across a number of sectors and employee categories. It also looks at actual bonus payments for 2013, target bonus levels for 2014, remuneration philosophy, incentive plans and benefits provided by employers.
Three quarters (73%) of Irish businesses expect to apply pay increases in 2014, compared to 63% in 2013. There is continued optimism for 2015 as the percentage of companies forecasting pay increases rises to 75%.
Where companies are planning to award pay increases, the typical planned pay increase is 2.0% in 2014 and 2.2% in 2015.
Competing for talent
While unemployment remains high, forecast at 12% in 2014, there are notable talent shortages for specific skill sets. In this context it is interesting to note that companies are focusing on market trends again. Our survey indicates that the incidence of companies referencing external benchmark data and CPI (forecast at 0.8% for 2014) to determine pay budgets has almost doubled compared to last year’s survey (increasing from 39% to 70% and from 24% to 40% respectively).
As companies implement modest basic salary increases, they are focusing on bonus plans to recognise outstanding performers. Eighty percent of participants provided information on some form of annual bonus plan. One third of these companies reviewed their plans in 2013, the vast majority of which (88%) enhanced their annual bonus plan offering. Forty percent of participants provided information on long term incentive plans and almost a third (31%) of these companies made changes to their LTI offering in 2013.
Focus on benefits costs
When asked what they are doing to address employee related costs, almost half (49%) of respondents identified benefits provision as the key area under review. In particular, pensions and health insurance have come under focus. Eighteen percent of companies are reviewing their pension schemes and 15% of those with private medical insurance plans are reducing the level of benefit.
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Aidan Walsh is a partner in the advisory practice and leads the corporate finance practice in PwC Ireland. Aidan has led teams that have advised both public and private sector clients on significant infrastructure, financing and procurement including many public private partnerships. He has also advised clients on many substantial acquisitions and disposals of Irish businesses.
In addition to his extensive financial advisory roles, Aidan spent two years on secondment as acting Chief Executive of VHI in 1997/98. In that role, Aidan led an extensive change programme involving organisational structures, new product delivery, changed provider relationships and systems. Aidan has been working with Irish local authorities over the past ten years and has advised many of them with respect to their strategic and capital programmes. Aidan leads the local government network for PwC Ireland.
Aidan is a fellow of the Institute of Chartered Accountants in Ireland.
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Garrett Cronin is a partner in the advisory practice and specialises in the area of performance improvement.
Garrett leads the finance and operations effectiveness teams, providing advice on sustainable cost reduction, shared services, outsourcing, programme and change management, working capital management and corporate performance management. He also leads the PwC European Shared Services Network supporting clients internationally with advice and insights on best practice.
Garrett has advised and delivered on complex finance and operational change programmes for many large Irish and Multi National Companies across multiple industries. He hosts PwC Ireland's CFO Network Forum, which meets a number of times each year to discuss and share insights into those issues challenging CFO's today.
Garrett is a Fellow of the Institute of Chartered Accountants in Ireland.