Align Management News Digest

March 2005

Skills pressure boost wages in smaller companies

WAGES grew by an average of 5.4% last year but workers in small firms received an 8% pay boost due to skills shortages.

Latest pay data indicates that many employers have been breaking the `social partnership' pay terms of 4.6% under the first half of Sustaining Progress. The pay study by the Small Firms' Association (SFA) indicates that wages in Ireland are now at 134%, or one-third above, the EU average, where wages grew by just 2.2% last year.

SFA director general Pat Delaney last night said that the strong evidence of skill shortages and constraints on labour supply will stifle the ability of the economy to expand. It will make it impossible for Ireland to move up the value chain without adding to wage inflation.

The SFA's 12th annual pay survey reveals that:

• No one earned less than €15,700 per year
• 34% of employee grades earn up to €25,000
• 42% earn between €25,000 - €35,000
• 15pc earn between €35,000 - €45,000
• One-third also get a bonus
• Average mileage allowance is 59 cents per mile

The survey covered pay and conditions of employment in 692 small companies with fewer than 50 employees drawn from manufacturing, distribution, retail and services. In total they employed 13,858 people.

The largest wage increases last year were in the quality assurance/engineer category at 20%followed by telesales and sales supervisors at 14% respectively. But pay in the services sector for such positions as canteen staff, cleaners, cooks and security guards, remained stagnant.

The retail sector had average increases of 11%, whilst sales and marketing had average increases of 9%. Clerical grades increased by an average 7%.

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