CIPD-IRN Private sector pay and employment 2025
The annual CIPD–IRN private sector report captures the changing pay and employment trends as well as the drivers of change in the labour market in Ireland
The annual CIPD–IRN private sector report captures the changing pay and employment trends as well as the drivers of change in the labour market in Ireland
In 2025, key considerations when deciding pay policy changed noticeably. Our survey found that general pay trends were a driver of pay policy among 60% of respondents, while economic conditions were a driver for 52%. Retention fell from being the most popular consideration to the third most popular at 48%.
Meanwhile, projected pay increases for 2025 have dropped to an average of 3.66%, compared with a projection of 4.38% for 2024, reflecting greater economic uncertainty. Pay increases should still be ahead of inflation but remain contingent on company and individual performance.
Pay projections for 2025In 2025, 58% of respondents are planning to increase basic pay. Meanwhile, 19% are planning to maintain their pay levels, with the rest not yet decided, reflecting a conservativeness to pay in light of external factors. But there has been a trend in the past few years where the undecided do in fact, award pay increases over the course of the year. Employers are planning to increase pay by an average of 3.66%, lower than the planned average increase of 4.11% seen in last year's survey, showing a cautionary approach by employers. The biggest driver of pay policy in 2025 was general pay trends with 60% asserting this. Alongside this are economic conditions (52%) and retention (48%), illustrating that the pay decisions of companies are largely dictated by external factors such as competition and sector norms as well as a need to retain talent in a tight labour market. |
Organisations are planning an average basic pay increase of 3.66% for 2025. However, our surveys have consistently shown that actual pay increases typically end up higher than planned.
Pay trends remained stable in 2024, with 78% increasing basic rates, reflecting market pressures, and 22% maintaining them, likely due to budget constraints. The average pay increase was 4.24%, which was 0.13% more than the planned increase. Almost half of respondents (49%) said pay increases were driven by normal ongoing change, while 39% cited individual performance and 32% said company performance.
Actual increases are showing a downward trend, standing at 4.24% in 2024 and 4.38% in 2023, which could indicate a potential easing of wage inflation pressures. Inflation, as measured by the Consumer Prices Index, had fallen to its lowest level in more than three years in August 2024 at 1.7%, which indicates that employees were no worse off in real terms.
Another trend that was seen in the findings was around lower increases in unionised organisations. Non-unionised companies gave average increases of 4.30% in the last 12 months, while unionised companies made average increases of 4.09%.
Looking ahead, 58% of companies said that they are planning to increase the basic rate of pay in 2025 (up from 52% last year), while 19% are maintaining rates (up from 16%) and 22% have not decided yet (down from 32%). While more unionised companies confirmed that they will increase base pay, our survey found that unionised companies have plans for an increase of 3.14%, compared with an increase of 4.20% by non-unionised companies.
Plans to make bonus payments remain widespread, with 66% of employers expecting to pay bonuses in 2025. The proportion of employers paying bonuses to all employees has increased slightly to 30%, up from 26% last year.
Meanwhile, 36% of employers are planning to pay bonuses selectively, down from 39% the previous year, suggesting a more targeted approach to reward. Additionally, 28% of employers do not offer bonuses (the same as 2024), and 6% said they didn’t know, at the time of asking (January 2025), if they plan to make bonus payments in 2025.
Plans for non-pay benefits remained largely stable, with 54% planning to maintain them over the next 12 months (up from 50% in the previous year) and 25% increasing them (same as previous year). Uncertainty has fallen, with only 12% of respondents saying they were undecided, down from 19% in the previous survey.
Top benefits given by employers are still pension contribution (86% of employers offering it as a benefit) and paid sick pay above state requirements (79%). The percentage of employers offering tax-free vouchers dropped to 59% (62% in 2024) despite a government increase in the tax-free amount employers are able to give.
The survey data on employee numbers over the next 12 months remains largely positive, with 42% of companies planning to increase their workforce in 2025, while 44% aim to maintain current staff levels. In the past 12 months, 47% of companies increased their workforce and 34% maintained it.
The percentage of companies planning to decrease their workforce is lower for the coming year (8%) compared with the proportion who reduced their workforce the previous year (19%). This suggests a stabilising job market with fewer reductions expected. The relatively small portion (6%) of companies uncertain about their future headcount indicates some degree of caution, likely influenced by ongoing economic and market conditions. Overall, while growth in employee numbers may not be as pronounced as last year, there is a general tendency towards maintaining or increasing headcount, signalling stability in the market.
We asked respondents what issues around the workplace they were expecting to face in the upcoming year. Employees wanting to work outside Ireland was identified by a lower proportion of organisations, down from 40% to 34%, while the share anticipating demands to work remotely from key personnel remains at about half.
There may be a decline in resistance to return to the office, with the proportion of employers expecting to face this issue dropping down from 48% to 45%, possibly as employees are becoming more accustomed to hybrid work models. Fewer saw the need to invest in company culture, as those who identified it as an issue dropped from 74% to 64%.
Companies have already made substantial efforts in building culture after the pandemic; making further investments seems less urgent. Office redesign hasn't been fully settled yet and there has been a shift towards flexible office layouts and ongoing adjustments rather than drastic transformations.
Progressive workplace policies are gaining traction, with more companies increasingly covering a wide range of issues. Notable were increases in the proportion offering domestic abuse support (60%, up from 48%), miscarriage policies (32%, up from 28%), and men’s health initiatives (16%, a sizeable increase from 8%).
Menopause policies (27%) and fertility benefits (20%) have seen slight growth, while menstrual health support remained low but had improved (11%, up from 7%). While overall adoption is increasing, uncertainty around these policies remains, highlighting the need for clearer employer commitments and awareness. Trends for this year are mostly on par with last year, with an increase in domestic abuse policies, influenced by the legal entitlement to domestic abuse leave.
Housing shortages remain a major challenge for employers, affecting the demand for hybrid/remote work (65%), pay and benefits pressure (68%), and attracting top talent (61%). While the impact has eased slightly, these figures indicate that housing remains a critical factor in workforce planning and how people want to work. Employers should continue to address these challenges through flexible working policies, competitive compensation, and strategic talent attraction efforts.
Trade union engagement remains steady, with 38% of companies engaging with a union, similar to last year. The data shows a shift towards longer pay deals, with 35% opting for 25–36 months, up from 25% last year. Organisations identified planning, stability, bargaining efficiency and inflation as the reasons for longer pay deals.
Collective bargaining with a trade union remains unlikely for most non-unionised companies (65% said they would not consider it), while only 7% were open to it. However, 28% said either ‘maybe’ or ‘don’t know’, which indicates some uncertainty or evolving considerations.
Interest in non-union collective bargaining is a consideration for 11% of companies, up from 9% in 2024. Opposition to it has declined, with those saying ‘no’ dropping down to 43% from 54% a year ago. Uncertainty appears to be growing, with 45% saying ‘maybe’ or ‘don’t know’ (37% in 2024). This suggests a shifting landscape, where more employers may be open to exploring alternative approaches to employee representation.
Regarding information and consultation forums to meet new EU laws on pay transparency, corporate sustainability reporting, and platform workers, 13% already have a forum in place, 21% were planning to establish one, 36% were not planning to, and 30% didn't know.
This suggests that while some organisations are proactively preparing for new EU regulations, a considerable proportion have yet to act or remain uncertain about their approach. The fact that 36% were not planning to implement a forum and that 30% answered 'didn’t know' indicates potential gaps in awareness or prioritisation.
Given the increasing regulatory focus on pay transparency, corporate sustainability, and platform workers’ rights, organisations that delay action may face compliance risks or operational challenges in the future.
Gender pay gap (GPG) reporting is progressing, with a lower proportion of companies yet to publish a report (45%), an improvement from last year (55%). In 2024, the companies required to publish a GPG report included those with more than 150 employees for the first time. In 2025, the numbers reporting will likely increase further as it will apply to employers with more than 50 employees.
GPG trends show small progress in closing gaps, with 33% reporting a decrease in their overall GPG (down from 37%), while 49% saw no change (up from 44%). Bonus-related GPG disparities widened, with 13% seeing an increase (up from 6%) and fewer companies reporting a decrease (22%, down from 24%). Part-time and temporary employee GPG changes remained largely stable, though there was a small rise in those reporting increases, suggesting that gaps persist in these employment categories.
Organisations are seeing changes on the back of their reporting. Focusing on inclusive culture has seen a downward change (46%, down from 58%), as has investing in action plan rollouts and bonus/reward reviews, suggesting a slower pace in structural adjustments, though some progress continues.
Meanwhile, there were improvements in areas of leader and manager behaviours (27%, up from 23%) and external benchmarking (23%, up from 17%).
Auto-enrolment, the new state retirement saving system for employees, will come into effect from 30 September 2025, and employers are being advised to prepare well in advance. Forty-four per cent of respondents anticipate an increased administrative burden, 45% expecting increased compliance challenges, along with 40% expecting cost implications for their organisation.
While only 8% said they would employ fewer people as a result of the changes, 16% said that it would impact pay and benefit improvements elsewhere. However, 46% expected new employees to join the company scheme from day one.
The impact of auto-enrolment costs varies by organisation size, with smaller employers feeling the strain most acutely. Among organisations with fewer than 50 employees, 29% stated they would cut back on other pay or benefits improvements to accommodate auto-enrolment costs. This concern is less pronounced in larger organisations, with 16% of those employing 50–249 people and 12% of those with over 250 employees anticipating a similar impact.
Organisations are gradually increasing their focus on workforce strategies to prepare for those reaching retirement age, which could be seen as reassuring considering that data from the Central Statistics Office shows that the number of people aged 65 and over in employment in Q2 2024 had reached 122,300, a rise of 57% since the same period two years prior.
Currently, 34% of respondents have a strategy in place to manage an ageing workforce (up from 26%) and more are conducting age audits (28%, up from 22%). However, age-friendly benefits (17%) and training for older workers (25%) remained limited. Retirement planning support was the most established initiative (61%), while training managers to be age-friendly remained low (18%), potentially leaving a gap in leadership preparedness for an ageing workforce.
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Mary leads the growth, development and contribution of the people profession in Ireland. She pushes forward our agenda of people-centric decisions, wellbeing, inclusion and flexible working through research, policy and member engagement.
Mary has a wealth of HR experience, supporting individuals and companies on the strategic people agenda, HR practice and organisation development. Previously she headed up HR Development at employers’ group Ibec, consulted widely across the public and private sector and held organisation development roles in the financial and consulting sectors.
Mary is on the Boards of the Public Appointments Service and the Retirement Planning Council and represents the people profession in Ireland at the European Association of People Management.
Meg is an experienced HR professional, previously working in HRBP roles for Irish public sector and global enterprises. She has a passion for showing the impact of the people profession through creating positive workplace culture. She is qualified to Masters level and is a lifelong learner in the field of people management.
Meg chaired the CIPD Southeast committee in Ireland for 4 years. During that time, she built strong networks providing key learning events and networking opportunities within her region and on the national committee. She began her role as HR Policy and Engagement Manager in August 2022, where she creates value for CIPD customers through the annual calendar of engagement, developing relationships with key stakeholders and wider business community.
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