Employees across the country will be glad to hear there’s a good chance they’ve got a pay rise coming their way in the coming year. The IIBN International Business Report reveals that more than half (55.2%) of businesses in Ireland plan to increase basic employee salaries over the next 12 months, while in the UK this figure rises to 66.7%.
Carried out by the Irish International Business Network (IIBN), the report, the only one of its kind, which assesses the attitudes of Irish business people across the UK and Ireland towards the corporate climate and international trade, also found that across the UK and Ireland, business confidence has risen dramatically in the last year, with 81% of respondents indicating that they were more confident than they had been in the past year.
Financial performance indicators
This rise in confidence is reflected in the financial performance indicators, which show that 77% of respondents reported an increase in turnover, up from 63.5% last year, with sales volume also increasing by 13% in the past year. More encouraging still, some 63.9% of respondents reported an increase in gross profits.
Commenting on the report’s findings, economist and IIBN Ireland board member, Susan HayesCulleton, states: “Economies here and in the UK are seeing a steady recovery. An increase in confidence has resulted in more people and businesses spending money, which has led to the increased sales we see in the report. The knock on effect of this is greater opportunities for employees and the opportunity to create an increase in real wages.”
Factors affecting business
HayesCulleton is not wrong. The survey also revealed that one of the greatest challenges facing businesses in the past 12 months has been a steady rise in staff turnover, with more than a quarter (26.7%) of all respondents stating it had had a negative impact on their business. When we look at the countries individually, we see that it is a greater issue in Ireland (36.7%) than the UK (20.5%).
Late payment from customers remains the biggest challenge facing businesses. However, its impact has declined over the past year. In 2013 56.2% of respondents stated that late payment from customers had a mild or very negative affect on their business. This has fallen to 45.1% in 2014. Better still, this figure is expected to drop by another 8.4%, as interviewees believe it will have less of an impact in the coming 12 months.
Ireland vs UK
Looking at the countries individually, UK respondents (85.3%) continued to marginally outperform their Irish counterparts (83.4%) in terms of customer demand and their ability to expand into new areas (41% in Ireland vs 61.5% in UK). The issue of late payment from customers seems to have shifted, with more Irish based businesses (46.7%) highlighting it as a problem than those in the UK (43.6%).
However, confidence amongst domestic respondents still appears to be higher than in the UK for the coming 12 months with a higher percentage expecting to see a positive impact in terms of customer demand (96.5% in Ireland vs 89.8% in UK) and their ability to expand into new areas (62.1% in Ireland vs 60.5% in UK).
HayesCulleton continues: “The results of the report are hugely promising. the IIBN, as a not-for-profit set up to help Irish businesses grow and expand into new regions, is hugely encouraged to see that Irish businesses, both home and abroad, are going from strength to strength and are extremely confident about their prospects over the next year.”