Average pay levels among small businesses in Ireland remain at a standstill, a recent study reports.
The results of a study published by the Small Firms Association (SFA) show that more than 75% of firms have frozen basic pay rates in the last quarter, with approximately two thirds opting to keep pay the same going into 2012.
The large scale survey polled 600 companies with nearly 13,000 employees.
7% of SMEs lowered basic pay levels by around 10% from April to June in an attempt to save jobs in the challenging economic climate. 3% of firms also anticipate having to lower pay levels by a tenth next year.
SFA director Patricia Callan says: "Jobs must be the top priority — both the maintenance of existing ones and the creation of new ones.
It is better to have more people at work on reasonable pay, than hundreds of thousands on the Live Register
"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’re clearly linked to productivity gains, if competitiveness is to be restored.
Of the companies expecting to implement a pay increase in 2011, more than half expect increased productivity in the next quarter.
76% of these respondents expect an improvement in processes, 69% foresee new product or service development and 42% anticipate increased workforce flexibility.
Although basic pay was down overall by 0.25%, 13% of those polled said they have raised pay by 2.5% in the most recent quarter. A fifth of these expect to increase pay by 3% next year.
Ms Callan believes that any basic pay increases are likely to be made primarily on the grounds of “productivity and innovation”.
