Irish employers are expected to take a “measured” approach to salary increases with pay rises expected to average at about 2 per cent to 3 per cent as businesses prioritise those in high-demand roles, professional recruitment consultancy Morgan McKinley has said.
In its latest Irish salary guide, the firm said the jobs market for professionals has settled down after the Covid-19 pandemic and companies are primed to take a more considered approach to hiring and pay than in recent years.
Firms in the Republic will be more likely to hold “out for the right fit” and to address areas of high demand within their organisations, according to the report, rather than opting for across-the-board pay rises.
In the technology sector, which “stabilised” in 2024 after a period of restructuring in 2023, employers are again on the lookout for talent in areas like cyber security, automation and information security, Morgan McKinley said.
Salaries in the tech sector have “largely plateaued”, according to the report, “with job movers securing modest increases of around 10 per cent, a stark contrast to the rapid salary growth seen in previous years”.
More than half of the professionals surveyed by Morgan McKinley said they are expecting a salary increase in 2025 while more than 10 per cent remain uncertain.
Economic uncertainty coupled with shifting hiring trends are “fuelling this uncertainty, making job security a top concern” for professionals.
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It means professionals in highly competitive industries are “increasingly looking beyond salary”, Morgan McKinley said, to more long-term concerns like career progression and work-life balance.
“We are seeing a shift from reactive salary increases towards more strategic talent retention initiatives,” said Trayc Keevans, global foreign direct investment director at Morgan McKinley.
“Employers who focus on structured career progression, meaningful benefits, and flexibility will be in the strongest position to compete for talent.”
On the employer side, wage inflation remains a concern and is likely to impact decisions around hiring and salaries this year, the firm said.
While 44 per cent of organisations in the Republic said they have increased salaries in the past six months, companies are increasingly adopting career progression plans and salary transparency regimes to attract and retain top talent.
“Salary transparency remains a contentious issue for many companies,” Ms Keevans said.
“Employers are wary of the impact open salary structures may have on existing teams, but there is growing pressure from employees and job seekers for greater clarity. Companies that can implement structured and transparent salary frameworks will strengthen their ability to attract and retain talent.”
Overall, she said the jobs market has settled into a more “measured pace” with the immediate post-pandemic period of labour shortages and disruption in the rear-view mirror. “While economic and regulatory challenges persist, companies that invest in salary transparency, structured career progression, and flexible working policies will be best positioned to attract and retain top talent in 2025,” Ms Keevans said.
