Recession
Labour Costs rate as Top Business Cost concern in 2010
By Patricia Callan, Director, Small Firms Association
Mar 30, 2010 - 10:13:49 AM

SFA Annual  Pay Survey reveals:

• 11% of employee grades earn up to €25,000
  
• 38% earn between €25,000-€35,000
  
• 36% earn between €35,000-€45,000
  
• 15% earn more than €45,000

Non –pay benefits:

• 67% of small businesses have sick pay schemes
  
• 60% of small businesses have pension schemes
  
• 43% of small businesses have health insurance schemes
  
• 78% of employers contribute to health insurance 
  
• 21% pay maternity benefit above Social Welfare
  
• Average mileage allowance is 72 cents per mile

Labour Costs rate as Top Business Cost concern in 2010

The 16th Annual SFA Pay and Conditions Survey shows that the typical employee of a small firm earns €34,422 per annum, works between 37.5 (salaried) and 39 hours (manual) per week, enjoys 21 days holidays per year and has a 67% chance of being part of a company sick pay scheme and 60% chance of being in a company pension scheme.

Main Findings

• The SFA Survey on Pay and Conditions of employment in 1195 small companies (with less than 50 employees drawn from manufacturing, distribution, retail and services), employing 26,790 employees has established the following main findings:
• The rate of pay for entry-level grades decreased across almost all job categories, reflecting the softening of the labour market.
  
• The average rates of basic pay varied from €365.10 per week (Cleaner) to €957.42 per week (Craft Chargehand).
  
• The respective range for salaried employees was €22,552 per annum (Trainee Laboratory Technician) to €55,507 per annum (Senior Engineer). 
  
• The lowest rate paid for any job category was that of a cleaner, which was 9% higher than the national minimum wage.
  
• The majority of firms have sick pay and pension schemes in operation (with more companies having schemes for staff than for manual workers).  
  
• Overtime premia of time and a half was most common Monday to Friday and for an early start; time and a half or time and a half for the first four hours and double time thereafter for Saturday; and double time usually applied on Sundays and Public Holidays.

The six largest job title responses in the survey had the following rates of pay:

Job Title	No of Companies	Average Annual Rate of Pay €
Senior Clerical Grade	1160	37,444
Intermediate Clerical	595	31,015
Skilled Workers	400	581.35 weekly
Sales Executives/Rep	400	48,609
Semi-Skilled Workers	385	581.35 weekly
Junior Clerical	375	24,511

By earnings and number of employees range, the figures break down as follows:

Annual Earnings €	Number of employees	% of Employee Grades
18,985-25,000	2947	11%
25,000-35,000	10180	38%
35,000-45,000	9644	36%
45,000-50,283	4019	15%
	26,790 (100%)	(100%)

The survey also found that 15% of small companies had income continuance and long-term disability schemes in place.  21% of small companies supplemented maternity benefits above Social Welfare payment and paid an average mileage allowance of 72 cents per mile (43 cents per kilometre).

In non-pay benefits, variations occur between non-salaried and salaried employees as follows:

	Non Salaried	Salaried
	No of companies %	No of companies %
Sick Pay Scheme	570             (71%)	750                  (93%)
Pension Scheme	420             (60%)	750                  (93%)
Medical Health Insurance	145             (28%)	255               (50%)

Commenting on the results SFA Director, Patricia Callan said that: “labour costs rate as the top business cost concern in 2010, despite the fact that 48% of small businesses have decreased their total pay bill last year (average decrease of 19.74%), with 33% maintaining it at its previous level; and 43% have decreased their employee numbers, with 41% maintaining them at existing levels.  It is clear that labour cost competitiveness will continue to be a top priority for small businesses in 2010, with 25% of respondents expecting to decrease their total pay bill this year (average decrease of 13.82%), with 47% maintaining it at current levels, and 18% expecting to decrease employee numbers, with 56% maintaining them at existing levels.

In conclusion, Callan stated:  “Jobs must now become our top priority – both the maintenance of existing ones and the creation of new ones.  To deliver this, pay moderation must become the norm, as small businesses, who employ half the private sector workforce, some 700,000 people, struggle to regain cost-competitiveness and thus ensure their business survival.  It is better to have more people at work on reasonable pay, than many on the live register, with the privileged protected few on artificially high rates of pay.  All must accept that there can be no return to the Celtic Tiger days of pay increases without productivity gains, as this simply makes us a high-cost location, vis-à-vis our international competitors and ultimately ensures a lose-lose scenario for all involved”.

Patricia Callan,
Director,
Small Firms Association
Tel: 01 6051602