It seems a little aggressive in relation to historical data, however. The Irish labour market is experiencing a squeeze in certain sectors as a result of a shortage of skilled workers, chief among them, technology. The professional services sector such as Financial Services and Law are also experiencing this squeeze and if Brexit goes ahead, this will only increase as UK firms open more EU centres in Ireland.
To attract and especially retain key talent, firms are experiencing wage inflation. You can see this mirrored in the unemployment rate which is now 5.9% for April (CSO) and is projected to average 5.6% this year, declining to 4.8% in 2019. Close to full employment, 4.5%.
Looking at average wages in technology in Ireland; the CSO states that between Q1 2013 to Q1 2018 wages in technology increased by 13% - 13.5% or 2.7% a year. Finance employment costs were higher at around about 16% or 3.1%.
However, in context of these increases, we should take a look at what happened in 2008/2009. We all know the crash happened. But what was the real effect on wages in technology around that time? According to the CSO, over 65% of business dropped wages by over 2%, for existing employees:
Companies hiring in this period across technology dropped. At RECRUITERS, we measured the drop to be close to 10% -15% as the roles in technology were generally in the €50,000 to 110,000 bracket, that we worked on.
Companies, in fairness, had to pivot and cut costs across the board to survive. Development of new projects was cut short. Employee contracts were changed in some cases or employees were made redundant, vendors were cut, nice-to-haves were shed, resulting in a trickle-down effect to all those supplier companies who in turn had to shed costs. There was a huge surplus of employees looking for a job, which made people willing to take a cut in wages during this time, bringing them back in earnings.
The CSO states that the average salary in Ireland for Software engineers was €50,000 in 2008 rising to €58,000 in 2016. In RECRUITERS, we saw that the average salary for a senior software engineer run at €55,000 from around 2013 until 2017 and then inflation kicked in and now it's averaging around €63K – a big jump in the last 18 months, largely driven by enormous demand.
But is this a big jump to catch up?
If wages have increased from €50,000 to €63,000 for a senior software engineer, not far from the CSO figures, a 2.2% increase or 2.2% increase on average annually. It's not all bad news for the software engineers as the consumer price index is generally low - below .5% in the last 4 years. But Rents. Now that’s a whole other story. Is this level unrealistic for people to live and work in a highly skilled role in Ireland these days?
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