Pay and Workforce Planning: What Employers Can Expect in 2027

Ibec’s latest Pay and Resourcing Forecast offers an early insight into employers’ pay and workforce planning expectations for 2027. The research, conducted as part of Ibec’s annual Talent, Trends and Pay Survey, draws on responses from more than 330 senior HR professionals. It found that 83% of participating businesses expect to increase basic pay in 2027, with an average anticipated increase of 3.1%. This represents a modest decline on the 2026 outlook, when 85% of businesses awarded pay increases averaging 3.5% across sectors.

Despite this moderation, pay increases remain firmly on the agenda for most employers surveyed. Ibec highlights several factors continuing to shape remuneration decisions, including competition for specialised skills, productivity and individual business performance. For HR professionals preparing for the next pay review cycle, the findings provide a useful benchmark against which to assess their organisation’s own remuneration strategy.

Workforce Growth Expectations Continue to Moderate

Alongside pay planning, the survey highlights a more cautious approach to recruitment. While 35% of businesses expect to increase employee numbers in 2027, this represents a decline from 37% forecasting growth for 2026 and 41% for 2025. Meanwhile, 8% of respondents anticipate reducing their workforce next year.

The downward trend suggests that employers are becoming more measured in their workforce expansion plans. Ibec describes this as a continued softening in headcount growth expectations, while noting that overall workforce resilience remains strong.

For businesses planning to recruit, increased production or demand for services was the most frequently cited driver, identified by 81% of respondents. Expansion into new markets was highlighted by 74%, while 56% identified building a future talent pipeline as a key reason for additional recruitment. Permanent employment also remains the dominant form of recruitment, accounting for 92% of new hires in 2026, compared with 89% in 2025.

These findings point to an ongoing need for employers to balance growth ambitions with careful workforce planning, ensuring that recruitment decisions are aligned with business demand and longer-term capability requirements.

Skills Availability and International Recruitment

Access to the right skills remains a significant consideration for HR leaders. According to Ibec, recruiting the talent organisations need, both in Ireland and internationally, continues to be a key priority. However, feedback from employers suggests that visa and employment permit procedures can create barriers to attracting international workers.

Businesses have also reported delays of up to 17 weeks in receiving Irish Residence Permit cards, with knock-on effects for business travel. Ibec has particularly highlighted skills shortages in the hospitality, construction and care sectors, reinforcing the challenges some employers face in securing the people they need.

For organisations reliant on specialist or hard-to-source skills, these challenges underline the importance of forward planning, reviewing recruitment processes and considering how best to attract and retain talent in an increasingly competitive labour market.

Implications for HR Planning in 2027

The findings provide a useful reference point for employers preparing their 2027 pay reviews and workforce plans. The anticipated average pay increase of 3.1% offers an external benchmark for remuneration discussions, while the moderation in headcount growth expectations highlights the importance of aligning recruitment with organisational priorities.

However, the survey average should not be treated as a recommended or universal pay increase. Each organisation will need to assess its own circumstances, taking account of affordability, business performance, productivity, recruitment and retention pressures, and the availability of critical skills.

As employers look ahead to 2027, the challenge will be to strike the right balance between managing costs and investing in the workforce capabilities needed to support sustainable business performance. A considered approach to pay, recruitment and talent development will remain central to achieving that balance.