Belfast Telegraph

Pay freeze trend 'set to continue'

Employees in the majority of small businesses continue to face a pay freeze with the trend set to continue next year, a survey has claimed.

The Small Firms Association (SFA) study found wage increases were only being given to reward productivity and innovation.

Patricia Callan, SFA director, said job creation must be the Government's priority, arguing it is better to be on "reasonable" pay than have hundreds of thousands claiming benefits.

"While there is little or no wage growth in the Irish economy, moving forward it is imperative that if any pay increases are implemented that they are clearly linked to productivity gains if competitiveness is to be restored," said Ms Callan.

The survey of 592 companies found that 76% have frozen basic pay rates this year, with 69% planning to continue the trend next year.

Some 7% have dropped wage rates by an average of 10%, with 3% expecting another 10% on average cut next year, and 13% have implemented a basic pay increase of 2.5% on average, with 22% expecting to increase basic pay in 2012 by 3% on average if their firms continue to grow.

"Basic pay increases are more likely to occur by exception on productivity and innovation grounds," Ms Callan added.

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