Five for 2025: Mercer’s top priorities for Irish employers this year  

Dublin, February 2025 - Irish employers have endured much turbulence in recent years. They’ve had to navigate their organisations through the complexities of Brexit, the economic uncertainties caused by a global pandemic, ever-increasing regulation and continuing geopolitical conflicts. Many have done so successfully, mainly due to being as prepared as possible and, in the case of the Covid-19 pandemic, adapting to new circumstances.

January is the time of year when employers are thinking about what lies ahead as part of their strategic planning, looking at the immediate and longer-term challenges and where their attention and effort should be focused.

This is the right approach and to assist we have identified five of the top priorities Irish employers of all sizes should focus on this year and what action they should take. 

1. Rising business and benefits costs

Escalating costs continue to present a significant challenge for employers and this is unlikely to abate in the short-term, particularly for small and medium-sized enterprises (SMEs). In 2025, labour expenses will continue to rise due to increases in the minimum wage and PRSI while energy prices and commercial rents will likely remain high. Interest rates are falling but are still higher than the eurozone average as we continue to tackle inflationary impacts.

Employers also face higher costs when it comes to the provision of benefits and health insurance, given that some insurers hiked premiums by up to 10 per cent during 2024. Many consider health cover to be one of the most important elements of benefit packages but as is the case with all benefits, they should review their existing arrangements to ensure they are both fit for purpose and provide value for money.

Additional costs could also arise following the introduction of the government’s automatic enrolment retirement savings regime at the end of September. If employers have not done so already, now is the time to prepare for this important development. For some, this task may be much more complicated than it initially appears. 

2. EU pay transparency directive

Few organisations are immune from the seemingly relentless increase in employer-related regulation, both domestic and European. This year, many employers will grapple with the implications of the EU pay transparency directive, which aims to promote transparency in employee remuneration across the EU.

The directive presents a range of new challenges, including requirements to disclose pay-related details and improve gender pay equity. Not surprisingly, some employers have concerns about pay information becoming widely known across the workforce given the increased risk of employee grievances and detrimental impacts on morale.

Conversely, others believe pay transparency will have a positive impact. Their company, for example, may become more attractive to top talent; there may be useful insights to gain from analysing compensation data; or, in time, employee engagement may actually be improved as employees recognise the value of equitable pay practices and a better understanding of how pay is actually determined. In the short-term the administrative burden of complying with the directive could also be sizeable, particularly for SMEs. Previously published in the Sunday Business Post

All employers with 50 or more employees must comply and a failure to do so risks financial penalties, legal challenges and possible reputational damage. Employers need to act proactively this year to be ready for the June 2026 compliance deadline. 

3. Employee wellbeing

The importance of employee wellbeing is well understood – the pandemic brought this sharply into focus – but we expect this area to be a particular priority for Irish employers this year.

This is driven by the obvious benefits of happier and healthier workforces in terms of increased productivity and improved talent retention.

As highlighted in Mercer’s 2024 Global Talent Trends report, employees also now see wellbeing-related benefits as an increasingly important aspect of their overall employment experience, and this is a factor more employers should focus on.

Indeed, employee engagement surveys consistently show that wellbeing is a top employee concern, and yet, as the report identified, only half of global employers approach work roles and structures with wellbeing in mind.

Wellbeing covers a number of traditional areas, including work-life balance and mental and physical health. In 2025, we anticipate accelerated interest in financial wellness from many workers at different stages of their lives as they navigate aspects of their personal finances such as saving and budgeting, debt management, taxation and retirement planning.

Employers can take steps to significantly enhance the overall wellbeing and engagement of their workforces, including by providing access to supports and resources through assistance programmes, education and technology solutions. 

4. The ongoing war for talent

Irish employers across multiple sectors continue to face significant challenges with labour shortages and a consequent “war for talent.” Much of the current highly competitive Irish job market, particularly for skilled workers, has been driven by the country’s strong economic growth, low unemployment rate and post-pandemic workforce realignments.

Demographic trends such as Ireland’s ageing population and shrinking working population are also contributing factors.

Much focus is now being placed on standing out in the market with enhanced compensation, better benefits and attractive perks such as flexible working arrangements. Employers also need to be agile and innovative to attract and retain the workers they need, and that means looking at areas such as the overall employee experience. 

5. Technology adaptation

The pace of change in the digital and technological landscape in the last few years has been breathtaking. According to Mercer’s talent report, managing the risks of digital acceleration and

cyber security ranks just behind inflation as the top near-term priority for global organisations. More positively, the integration of AI and improved automation and data analytics provide unprecedented potential for organisations to enhance efficiency and innovate.

This cannot, however, happen in a vacuum. Employers must understand how the rapid and transformative effects of technology will impact staff and work practices. The challenge this year will be twofold: ensuring the organisation is operationally secure and resilient to cyberthreats and taking the actions necessary to maximise the benefits of improved technology.

This means helping employees thrive in this changing environment, putting the right supports in place, providing training and having clear career development pathways for workers.

While there is much to navigate in these five areas, employers that take proactive steps early will not only mitigate challenges and risks but also realise the advantages of a more engaged and productive workforce. 

Article previously published in the Sunday Business Post

About Mercer

Mercer, a business of Marsh McLennan (NYSE: MMC), is a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people. Marsh McLennan is a global leader in risk, strategy and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With annual revenue of $23 billion and more than 85,000 colleagues, Marsh McLennan helps build the confidence to thrive through the power of perspective. For more information, visit mercer.com, or follow on LinkedIn and X.