UK
London, 2 March 2010

• 73%  of Northern Irish companies reduced payroll costs in 2009 - on average by 10%
• One in four companies forecast reductions in employee numbers in 2010
• Over half plan salary freezes in 2010. Amongst the rest, the median increase across all employee groups is 2%.
• 59% are making changes to at least one HR plan or policy, to reduce costs - most commonly to pensions, training and development, and overtime.

A survey of Northern Irish companies has shown that a quarter of participants (27%) are planning reductions in their employee numbers in 2010, although the situation has improved since 2008/9 when staff cuts were made by as many as two-thirds (65%) of organisations in the North.

The survey, by HR and benefits consultants, Mercer, also showed that nearly three-quarters of companies (73%) reduced their payroll costs in 2009. On average, these costs were reduced by 10%. Patrick Robertson, Senior Consultant at Mercer, commented: “Companies have taken a number of steps to reduce their costs including changes in their rewards and hiring policies. More drastic measures such as compulsory redundancies and pay cuts have been less common, particularly in the larger organisations.”  The most popular measures taken are hiring freezes, voluntary redundancies and a reduction in overtime and incentive payments.

Over half of the survey respondents anticipate a salary freeze in 2010. Amongst those organisations planning an increase in 2010, the median reported increase is 2%. “In many cases, we’re seeing a continuation of the salary freezes that many companies instigated in 2009," said Mr Robertson.

A comparison of the survey results in Northern Ireland with similar results in the Irish Republic shows that Northern Irish companies have been quicker to react to deteriorating economic conditions, with more of them reporting salary freezes in 2009 than in the Republic. However, for 2010, more organisations in the South are projecting salary freezes than in the North.  Mr Robertson commented: “Part of the difference is likely to have been driven by national wage agreements in the Republic, and the fact that Northern-based companies reviewed their salaries later in the year, allowing more time to react.”

In addition to cuts in overall payroll costs, 59% of organisations in Northern Ireland reported changes being made to at least one of their employee benefit plans and policies, in order to reduce costs. The areas receiving the greatest attention are pensions (both defined benefit and defined contribution plans), training and development, and overtime payments.

Forty percent of organisations are also taking a Total Rewards approach to employee communications in order to promote their current benefits package and improve employee engagement. Mr Robertson commented: “Along with changes in their HR policies, an increasing number of employers are moving to a more integrated approach to communicating their company benefits. This way, employees are better able to appreciate the extent and value of the entire package they’re being offered.”

Notes to editor
The Mercer Human Capital Planning for 2010 Survey in Northern Ireland was part of a wider survey across the whole of Ireland, involving responses from 126 private sector organisations industry-wide in the Republic and with 22 responding in the North.
 
The survey, conducted in late 2009, explored the actions organisations have taken in 2009 and their Human Resource plans for 2010. The Northern Ireland- based respondents were primarily subsidiaries of multinational corporations and large Northern Irish companies.  They represent some of the largest private sector employers in the North.