Outlook for 2023

As part of our service to clients and candidates, Link Personnel Services is happy to publish our annual salary surveys for 2023. We publish our surveys at this time every year to measure the impact January, traditionally a very busy month, has on pay in Ireland. 

This January has brought change, as usual, but looking through a wider lens, it has continued the momentum built throughout the last 12-18 months. 2022 saw a tightness in the labour market, and consumer price inflation that has inevitably moved our salary bands compared to our last survey. In January 2022 we forecast wage growth of 4-6% for the full year. Most indicators have borne that out, showing growth hovering around the 5% mark. 2023 will also see wage growth, but it will be more muted. Link Personnel forecasts that growth will be between 2.5-5%. Continued high inflation, shortages of quality candidates and the fact that salary reviews complete in Q1, for most companies, mean the bulk of this increase will happen in the first half of the year. Q3 and Q4 are likely to see a lessening of wage increases as inflation cools and labour market conditions loosen.

Hybrid work policies, which have been in the beta testing stage up to now, look set to crystalise this year. While employers seem keen to bring staff back into the office on a more regular basis, early adopters of stricter WFH policies will be penalised. Yes, salary is still the most important factor when a candidate assesses a job opportunity (especially given recent cost of living increases), but applicants have not given up on flexibility. Salary is a necessary but not sufficient incentive to attract the right people. Employers must take heed of this, as well as keeping an eye on what industry competitors are offering with regard to all benefits, not just WFH. 

Broadly speaking, the only certainty is that the economy and the labour market will be uncertain as the year progresses. If monetary and fiscal policy are handled adroitly, we may see a “soft landing”, however, history shows us that when inflation is this high and interest rates rise this much, this quickly, to combat it, there is fallout for the economy and the labour market. Of course, that doesn’t necessarily mean a brutal recession is on the way. At present, the sectors covered by Link Personnel are marked by a shortage of candidates, so any softening in labour market conditions may well bring more of a balance between available candidates and open vacancies, rather than suddenly turning a dearth of candidates into a dearth of jobs. 

We are increasing our staffing levels this year, as well as adding to our search and selection capabilities, in order to enhance our service. We stand ready to provide our help, expertise, and analysis to candidates and clients alike, and we look forward to working with you throughout 2023 and beyond.

(Please feel free to contact me to discuss the market in general, or your industry specifically)

Cormac Spencer
Director

Direct: +353 1 845 4651

cormac@linkpersonnel.ie