Report: Over 70% of pay rises for Northern Ireland staff were driven by higher cost of living

Pay rises given to staff in Northern Ireland last year were primarily driven by the ongoing increase in the cost of living, according to new research by Hays.

The research, which forms part of the Hays Salary & Recruiting Trends guide 2024 received over 14,900 responses from employers and professionals, including 724 responses in Northern Ireland.

Over two-thirds of employers (71% in NI vs 70% UK wide) said recent pay rises given to staff have been influenced by the increase in the cost of living – rising from 54% who reported this the previous year.

Amongst the employers surveyed, 85% said they increased pay for staff over the last 12 months – with two in five (37% in NI vs 40% in total) saying they have increased pay by over 5%.

Just over a quarter of professionals (29% in NI vs 27% UK) said they have received a cost-of-living increase in the last 12 months, and 36% in NI and the wider survey said this has had a noticeable impact on their life. But nearly two-thirds (64%) said the increase hasn’t had a noticeable impact.

The rise in the cost of living has not only resulted in many employers continuing to increase pay for staff, it has also led employees to weigh up whether they’d be better off moving jobs for a higher wage or staying put for job security.

In total, 42% of employees (41% in NI) said the current cost of living is making them more inclined to move job, mainly due to their current salary being unable to cover their living expenses (66% in NI vs 58% UK wide).

On the other hand, 21% of NI employees (17% in UK) said the cost of living is making them less likely to want to move job, either because they are worried about leaving a secure position (52% NI vs 42% total), they’re worried about the job security in a new position (24% in NI vs 23% total) or they’re concerned they won’t get the same benefits in another role (17% in NI vs 19%).

The findings also revealed that employers admit there’s room for improvement when it comes to pay transparency. Although 65% of NI employers (60% in UK) said they are transparent about pay, the other 35% (40% in UK) said their organisation isn’t consistently transparent with staff about how pay levels and pay rises are set. In NI over half of professionals (52%) believed their employer isn’t transparent when it comes to pay, higher than the 44% who said the same in the overall survey.

John Moore, managing director of Hays in Northern Ireland, said: “It’s a really challenging time for both employers and staff as the cost of living continues to rise. Although a good proportion of employers have continued to offer pay increases, or cost of living support over the past 12 months, it’s clear that some workers are seeking higher paid salaries and new jobs in order to cover their living expenses.

“What organisations can do is be as transparent as possible when it comes to pay in order to build an important sense of trust between employers and staff. It’s also crucial for organisations to communicate what support might be available for both existing staff and prospective employees, which in turn improves talent attraction and retention.”