More than two-thirds of Irish firms expect to award pay rises next year, with many also planning to take on extra staff, according to new research from business group Ibec.

The survey of close to 400 member companies shows 71 per cent of businesses will likely increase basic pay with the median rise to be 2 per cent, broadly unchanged compared to the last three years.

So far this year 64 per cent of companies have awarded pay increases. This compares to a projected 71 per cent of firms at the beginning of 2016, and 69 per cent in April. Some 36 per cent of companies have maintained current pay levels.

Pay awards this year have remained modest with a median increase of 2.2 per cent, the research shows.

Not surprisingly pay rises are most likely in larger firms and in companies operating in the IT sector. SMEs are least likely to award increases

Staff numbers

In addition to pay rises, 42 per cent of the firms surveyed say they plan to increase staff numbers next year. Some 64 per cent of companies expect to take on more permanent staff while, 50 per cent plan to increase the number of temporary staff they have.

In addition, 15 per cent of organisations said they will likely use more agency staff.

Ibec said a significant number of companies still could not afford pay rises but said that, due to record low inflation, the economy as a whole was going through a period of strong real wage growth.

“Most workers will again see positive economic trends reflected in their pay packets next year, but we must not lose the hard-fought competitive gains of recent years. The focus must remain on job-creation, especially given the heightened uncertainty that Brexit and currency pressures present,” said Ibec’s director of employer relations Maeve McElwee.