Hospitality firms give inflation-busting pay hikes, says Ibec survey

Hospitality, tourism, and leisure companies increased pay by an average of 5.9pc this year. Photo: Getty Images

Sarah Collins

Hospitality, tourism and retail firms boosted staff pay by between 5pc and 6pc this year, well ahead of other sectors but in line with or slightly ahead of inflation.

Education organisations, food and drink makers and pharmaceutical firms awarded the next-highest pay increases – between 4pc and 5pc – according to business group Ibec’s 2023 HR Update survey.

More than 80pc of firms increased basic pay this year and plan to do so again next year.

Pay increases across all firms this year worked out at an average of 4.4pc, ahead of expectations.

The vast majority (82pc) are planning increases of 3.8pc on average next year.

Inflation is expected to average 5.3pc this year, the Department of Finance estimates.

“Some sectors, like hospitality and retail, stand out with notably higher-than-average pay increases, which can be attributed to labour shortages within these industries,” said Maeve McElwee, Ibec’s executive director of employer relations.

“These sectors are currently grappling with challenges related to recruitment and retention, as well as adjustments in the national minimum wage.”

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Hospitality, tourism, and leisure companies increased pay by an average of 5.9pc this year – well ahead of other sectors and above expected inflation – and plan average increases of 6.5pc next year, twice the rate of expected inflation.

Retail businesses raised pay by 5.3pc this year and are expecting to hike by a similar amount in 2024.

Metals manufacturers and engineering firms reported the lowest planned pay increases next year, of 2.9pc, in line with expected inflation.

Firms are still hiring, the Ibec report found.

Almost half (45pc) of organisations – led by services and hi-tech manufacturing firms – increased their headcount this year, due mainly to increased demand and business expansion.

Staff turnover and absenteeism levels were generally lower this year or the same as they were in 2022, pointing to a tight labour market and recruitment challenges, Ibec said.

Almost half (45pc) of those surveyed plan to increase employee headcount next year, while around half (49pc) expect staff numbers to stay the same, the survey said.

Ms McElwee said new rules on statutory sick pay, pension auto-enrolment, leave entitlements and minimum wages pose “significant additional cost challenges for businesses in the short to medium term”.

Ibec surveyed 378 HR professionals to compile the report, which is to be unveiled at the group’s annual HR leadership summit on Wednesday

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