IRISH COMPANIES are more willing to make redundancies and implement pay cuts to combat the global recession than their counterparts in Europe, the Middle East and Africa (EMEA), a new survey has found.

Commissioned by business consultancy firm Watson Wyatt, the October 2009 pulse survey details how the global recession has affected people management, business priorities and business plans at 700 companies across the EMEA region, including almost 100 from Ireland.

The survey found that Irish organisations had the highest rate of workforce reduction among EMEA nations, with close to 80 per cent of Irish respondents reporting changes to their organisational structure and 61 per cent reporting lay-offs. This compared to an EMEA average of 48 per cent reporting redundancies.

Just under half of Irish participants said they would continue to make reductions in their permanent employee base in the next six months.

Significantly, 26 per cent of Irish firms surveyed had introduced pay cuts, more than twice the EMEA average. This also represented a 50 per cent increase on the number of Irish firms who reported salary cuts in a preliminary survey carried out by Watson Wyatt in May 2009.

The survey also found that pay freezes have been more prevalent among Irish employers than in those in other EMEA markets, and firms said they expected this trend to continue in to 2010. Some 75 per cent of surveyed Irish companies already had a pay freeze in effect and a further 14 per cent expected to implement one within the next 12 months.

The average pay increase predicted by respondent Irish companies for 2010 was zero.

Almost half of Irish respondents reported that they would pay out lower employee bonuses for this performance year, and up to 35 per cent claimed they would not be paying any bonuses for 2009.

Irish companies were also more pessimistic about the economy returning to growth in 2010, with 31 per cent of participants believing their company would not record improved results until the end of 2010 or later. Just 19 per cent of companies surveyed in the EMEA region concurred with this downbeat analysis.

“The speed and depth of the downturn is reflected in the degree to which redundancies, pay cuts and pay freezes have been applied in Ireland. While these actions will continue well into 2010, their prevalence and severity does seem to be slowing down,” said Kevin Empey, head of human resources and reward consulting at Watson Wyatt.

“On the basis of this international research, Irish organisations have reacted more than those in other countries to manage the effects of the economic downturn.”