The Economic and Social Research Institute has said more companies should share their profits with their employees. In its latest review of the economy, the Institute says that a profit-sharing policy would help keep wage increases within reason, and it should be adopted as part of any new social partnership programme. While the concept of companies sharing some of their profits with their employees is normal in many other counties, it is still a rarity in Ireland. According to the ESRI it should be used much more as a way of rewarding workers and should be part and parcel of any new national pay agreement.

The Instutute says that there is a serious danger that wage demands will well over-shoot what the economy can afford and could in turn lead to inflation and loss of competitiveness. While acknowledging that workers have a right to expect higher wages, the Economic think-tank believes that other means instead of straightforward pay packet rises must be explored during the forthcoming talks between all the social partners. The Institute claims that profit sharing is one way of avoiding a series of excessive pay demands over the next five years. It also warns that a new programme must not be agreed to at any cost adding that it must be grounded in economic and political realities.