A majority of companies are planning to award pay rises next year, according to Ibec's latest HR Update report.
The employer's group found that 71% of companies are planning pay increases, up from 64% this year.
However, the increases will generally be modest, about 2% on average, with larger firms - particularly those in the technology sector - most likely to up pay levels.
Ibec said that the growth is due to record-low inflation and a recovery in economic confidence.
Ibec's director of employer relations, Maeve McElwee said that modest increases are both positive and necessary.
"Obviously the key issue for employers is the whole issue of competitiveness," she said.
"And bearing in mind that there are still sectors within the economy who are not in a position to increase pay year-on-year, the importance for employers now is to maintain a level of competitiveness, to ensure that we don't end up with wage inflation, beyond what allows us to compete in Europe and internationally and also with the UK very particularly in light of Brexit."