Abrivia 2017 Salary Survey and Economic Commentary
In 2017,the annual Abrivia Recruitment Salary Survey and Employment Trends is undertaken in association with Trinity Business School at Trinity College Dublin.
Donal O’Brien, managing director, Abrivia Recruitment said, “We are delighted to partner with the Trinity Business School for our seventh annual salary survey. Our team of experts at Abrivia and Trinity Business School have provided rich and comprehensive insights into the Irish employment market against the background of the current economic landscape.”
The data has been compiled from a survey of 7,400 companies and 40,000 employees across multiple industry sectors. The economic commentary has been written by Dr Brian Lucey, professor of finance, with analysis from Dr Charles Larkin, research associate/adjunct lecturer and in collaboration with Dr Na Fu, associate professor in human resource management, Trinity Business School.
Donal O’Brien, said, “77% of employees expect to receive a pay increase in 2017. 84% of firms expect to hire more staff, with 75% of firms increasing salaries by up to 5% in 2016. 80% expect to increase salaries again in 2017 by a similar amount. From a recruitment perspective, the challenges facing companies this year will be focused around new talent acquisition and of course the retention of key team members. With this in mind, companies are already investing in retention tools along with clear people development strategies.”
Professor Brian Lucey commented “The most recent estimates have suggested that GDP growth this year will reach 4.9%, the highest in the European Union. This is despite the economic uncertainty caused by Brexit and inflated GDP figures in 2015 which saw the CSO revise growth figures upwards from 7.8% to 26.3%, due to an unexpected windfall from a few companies in the multi-national sector. However, this source of growth is volatile and should not be relied upon year after year.”
83% of companies in the ICT sector are planning to increase headcount, some by up to 50%, and 69% plan to increase salaries by 3% or higher in 2017.
Marketing, Sales and ICT sectors are forecasting the greatest number of hires in 2017 with Legal close behind
36% of employers said ICT roles were the most difficult to fill
Engineering, project management, quantity surveying and other construction related roles are now becoming more difficult to fill.
58% of employers in the ICT sector see the cost of rental accommodation as a challenge to recruitment
Brexit – human resources professionals are the most concerned, saying that job mobility prospects between Ireland and the UK and between the UK and Europe could be disastrously affected.
50% of employers feel that the marginal tax rate is making it difficult to attract overseas talent
41% of employers said that the shortage of rental accommodation was affecting their ability to recruit staff.
77% of employers increased their headcount in 2016, with 84% planning new hires in 2017, with ICT and Sales departments as the targeted growth areas.
The numbers of Irish returning from overseas is still low, over 50% of employers said that none of their current workforce included Irish returnees.
Almost one third of employers said they expected to lose staff because of increasing rents
72% of employers plan to pay bonuses in 2017.
Almost 63% of employers said that ‘Millennials’, born between 1980-2000, were the hardest to manage but human resources professionals cited ‘Baby Boomers, (born between 1946-1964) as the most difficult, probably reflecting the pressures of staff approaching pension age.
47% of employees living outside Dublin said they would need a salary increase of over 20% to move to Dublin for work.
80% of employees are in favour of a six-hour working day
One-fifth of those said their salary couldn’t accommodate the rental increases they experienced in the past year.
45% of employees surveyed said they would only be prepared to drop their salary by less than 3% to work outside Dublin
44% of employees surveyed said they had no private pension, with over half of those saying they had no plans to put one in place in 2017.
79% said a negative review of a company’s working environment would influence their decision to attend an interview or accept a role
A reputation for diversity was also cited by around 40% of employees as having ‘some impact’ on their decision to accept a job
Glassdoor is now the most popular for company reviews, followed by Irishjobs, Indeed and Twitter
Professor Brian Lucey commented, “FDI inflows in 2015 were equivalent to 50% of GDP. By value, 90% of Irish exports are conducted by these multinational companies. The top 20 firms for exports are all multinationals making up 60% of exports and 13% of employment. 40% of all corporate taxes are paid by the top 10 FDI firms. The Abrivia Salary Survey is made up of respondents who are 56% MNC employers, which provides a good overview of what is taking place in this important sector of the Irish economy.”
OTHER EMPLOYMENT AND SALARY TRENDS
36% of employers said that ICT roles were the most difficult to fill, followed by sales (20%). Engineering, project management, quantity surveying and other construction related roles were also proving difficult to fill.
Salary expectations of candidates requiring visa sponsorship are now broadly the same as their Irish counterparts, according to 56% of employers. 9% had higher salary expectations of between 6-10% while 35% had 10-15% lower salary expectations than their Irish counterparts.
When no visa was required, 70% of non-Irish applicants based outside of Ireland has lower salary demands than Irish employees living here.
41% said that the shortage of rental accommodation was affecting their ability to recruit staff.
Almost one third of employers said they expected to lose staff because of increasing rents. 27% said the cost of purchasing a new home was hindering their ability to recruit staff and 28% said they expected to lose employees for the same reason.
Over 50% of employers said that none of their current workforce included Irish returning from overseas. Where they are returning, ICT is the main sector, followed by finance and sales, with construction related roles also on the rise.
Almost 63% of employers said that ‘Millennials’, those born between 1980-2000, were the hardest to manage.
70% of employees expected their salary to increase in 2017 with just over half saying they planned to stay put.
Over 81% said that, before accepting an interview, they would seek out reviews of the company from reputable sources and almost 79% said a negative review of a company’s working environment would influence their decision to attend an interview or accept a role. 47% would check Glassdoor first, followed by Irishjobs (45.5%), Indeed (25%) and Twitter (16%).
Healthcare (cited by 47%), followed by sick pay (41%) and childcare costs (23%) were cited as having a major impact on the decision to accept a job. Interestingly, a reputation for diversity and dress code were cited by around 40% of respondents as having some impact as well.
44% of employees surveyed were living in rented accommodation, with 21% reporting increases greater than 10% in 2016. One-fifth of those said their salary couldn’t accommodate the rental increases they experienced in the past year. 31% said that up a quarter of their take home pay is spent on rent, while 27% of respondents said it was over one-third. 15% reported that just under half of their take home pay was spent on rent. 32% said they planned to seek a wage increase in 2017 based solely on changes to rent.
Professor Brian Lucey commented, “The Abrivia Salary Survey showed that about 44% of respondents were in rental accommodation. 29% of those in rental accommodation are paying more than they can afford yet 68% of employees won’t seek a pay increase due to rent. While rent was not sufficient to bring about salary demands, home purchases were. 63% will seek a salary increase due to the housing market conditions. 65% are willing to relocate jobs to find a more affordable location to purchase a house, and 65% are willing to change jobs in order to obtain a mortgage.”
The survey included a special question on Brexit looking at mobility and profitability. While both employers and employees said that Brexit would have some impact on their salary prospects or their firm’s profitability in Ireland in the medium term, they were more concerned about employment mobility prospects between Ireland and the UK as well as between the UK and Europe.
Donal O’Brien stated “Human Resources professionals were the most pessimistic overall, and in particular said that mobility prospects would be disastrously affected.”
ICT and Legal employees were the least concerned about their salary prospects and their firm’s profitability in Ireland.
The Legal sector, employers and employees alike, sees itself as the most insulated from the potential effects of Brexit, possibly reflecting two factors; it’s more focused on domestic matters and has a better understanding of what will happen rather than what might happen following the triggering of Article 50.
Professor Brian Lucey commented, “There are currently 230,000 Britons resident in Ireland and approximately 332,000 Irish nationals reside in the UK. This arrangement has brought up a discussion of Ireland as a special case for the Article 50 discussions due to the nature of the Irish-British relationship and long standing common travel area. The problem is that Poland and India have a greater claim for special treatment on the basis of 916,000 and 362,000 resident nationals respectively.”
THE WORKING IN DUBLIN PREMIUM
Almost half of employees based outside Dublin said they would need a salary increase in excess of 20% to move to Dublin for work and the findings were slightly higher for those in working in Accounting (54%), Marketing (53%) and ICT (49%)
Conversely, 45% of all employees surveyed said they would only be prepared to drop their salary by 1-3% to work outside Dublin; a quarter said they would be prepared to drop up to 5%, and 21% said they’d be prepared to drop their salary by 10%. One in ten said they wouldn’t consider moving outside Dublin at all. Those working in Sales and Legal were the least resistant to working outside the Dublin area.
While some clients were initially closed to the idea of recruit non-EU candidates due to visa implications in the ICT sector, they’ve been forced to look further afield over the past year. Several employers are looking to increase headcount by 50% and 69% expect to grant raises of 3% or higher. It is also the market with the largest non-Irish national employee base.
2016 has been a strong year for Accountancy positions generally. The rise in permanent contracts has led to a 19% downturn in the volume of temporary contracts, with companies now having to offer completion and performance related bonuses to hold onto contract staff. A talent shortage in public practice accountancy firms has meant significant investment in attracting staff back from overseas and reviewing policies around parental leave, paternity leave and flexible working practices.
Human Resources was badly hit during the recession but the number of permanent jobs available has increased 50% year on year since 2015, putting pressure on companies seeking contract workers to offer premium salaries and completion bonuses.
For Insurance, Compliance and Risk, 2017 is going to be the biggest year for this sector in a long time. Ireland continues to be a hub for Reinsurance, Captive and International Life companies with the potential to become an even bigger player due to the potential onset of Brexit. While it’s been a turbulent year with many redundancies for General Insurance, the Broker market has seen the biggest recruitment growth and this will continue into 2017.
The Legal sector is the most in favour of a potential introduction of the six -hour work day and finds Millennials the most difficult of all to manage.
In Sales and Marketing, the demand for skilled digital professionals continues to outstrip supply and it also is the most fearful of the potential impact of Brexit. It also has the highest number of staff who leave because of organisational culture issues and the most strongly against the idea of a six -hour workday. While growth is forecast, there is caution as over 400,000 jobs depend on trade with the UK.
Andrew Meehan, director of technology services at Abrivia Recruitment, said, “2016 was a year of excellent growth across all sectors of the Irish ICT marketplace. It is a candidate led market and salary levels have seen a marked increase in certain skillsets like development, analytics and IT security. Coupled with this, organisations have expressed concern around their abilities to scale up and deliver critical programmes of work due to the lack of available talent.”
42% of employers said that the importance of diversity management across age, gender, race and sexual orientation had increased in the past year and the biggest challenge was gender diversity, followed by race and age.
0ver 30% of employees said that the importance of gender diversity management in their company had increased in the past year. Unlike employers, they saw race diversity as the biggest challenge, followed by gender and then age. Nearly 40% of employees felt that their HR department was not providing sufficient support for diversity management in their workplace.
A reputation for diversity was also cited by around 40% of employees as having an impact on their decision to accept a job with a company.
SIX HOUR WORK DAY
Following a series of successful experiments, Sweden has recently begun to introduce the six- hour workday in a bid to increase productivity and make people happier. In general, Irish employers were almost equally split on whether it should be introduced into Ireland but the response varied across the sectors.
Accountancy, Legal, Financial and Human Resources were largely in favour of the six-hour work day while ICT was strongly against, as were Sales, Marketing and Office Support. Employees were strongly in favour, at 80% across all sectors with 87% believing it would increase productivity. The strongest advocates for a shorter workday were those working in the legal profession.
The willingness to provide visa sponsorship for difficult to fill roles was split almost evenly amongst employers overall with Marketing and ICT the most in favour.
28% of employers, reported that the current visa regulations were making it difficult for them to recruit overseas talent, with Indian candidates the most affected, followed by the USA and China. The figure rose to 36% for companies in the ICT sector.
“Many technology clients, especially those that are scaling up significantly, are far more predisposed towards hiring and sponsoring candidates from overseas and non-EU countries. Multinationals in particular realise that the ICT market and the acquisition of key skillsets is based on the attraction and redeployment of talent globally,” commented Donal O’Brien.