The upcoming auto-enrollment pension scheme in Ireland will bring a significant shift for employers. Under the new system, all employees aged between 23 and 60 who do not currently have a pension arrangement in place will be automatically enrolled.

This means one thing for your business: an increase in wage costs.

Click Here to Watch Our Webinar: Gripping Stuff

But before you panic, let’s break it down — because this isn’t just a cost. It can also be an opportunity.

The Rising Cost of Employment

This new pension contribution requirement will come on top of increased minimum wage rates, further adding to the cost of employing staff. But here’s the reality:

Investing in your employees is never a waste of money.

Today, one of the hardest challenges for businesses is finding and keeping capable, motivated employees — the kind of people who want to learn, grow, and help make your business profitable. And the truth is, employees are only valuable if they’re generating a return for your business. That’s your job as the employer: to utilize your team effectively.

Where the Real Costs Lie

The most expensive part of employing people isn’t just their hourly rate. It’s the non-productive time you still have to pay for — holidays, bank holidays, and the many types of statutory leave: sick leave, bereavement leave, parental leave, and more.

These are real costs that must be built into your pricing and cash flow planning.

Pension as a Loyalty Builder

While pension auto-enrollment will mean an extra contribution from the employer, it can actually increase employee loyalty. Many people view their job not just as a paycheck, but as a long-term security — and a pension scheme is a tangible part of that.

Importantly, employees do have the right to opt out of the scheme after six months, though they’ll be automatically re-enrolled at a later date. This means some flexibility remains, and the initial impact may not be as dramatic as you think.

Smart Businesses Plan Ahead

Yes, it’s a cost increase. But it’s not as bad as you might fear. A well-trained, well-managed team can generate far more value than they cost — if your pricing and payment terms are set correctly.

This is your chance to:

  • Review your pricing strategy to ensure you’re covering the true cost of employment.

  • Strengthen your payment collection processes to protect cash flow.

  • Position your business as a place where employees want to stay and grow.

Grab the opportunity.
Investing in your people is also an investment in your business.

If you’d like to discuss how we can help you manage these changes smoothly through our payroll services, email payroll@kevinbarry.ie any time.
Nina, our in-house payroll expert, will be happy to guide you through your options.