Workers who have forgone pay rises for over five years may be about to receive a boost in the New Year, according to recruitment firms, employers, government ministers and union negotiators says Gerald Flynn writing in the Irish Mail on Sunday.

While some small employer groups still claim they cannot afford to meet rising costs, according to the business and employer association (IBEC) chief Danny McCoy “pay pressures” are starting to emerge in parts of the economy - especially in larger firms and the public sector.

“There needs to be a broad discussion around general income trends and what is right and sustainable for the economy at this time,” he said.

Harking back to his pre-Budget tax-cuts agenda, he added: “Establishing broad pay norms linked to productivity would be useful for some businesses but a "one-size-fits-all" centralised wage agreement is not the answer.” IBEC said a slim majority of its employer members awarded pay rises in 2014. It expects similar levels next year, with +2% to +3% pay rises being the norm.

Employers may have to give some ground on employment security such as addressing zero-hour contracts and sectoral minimum terms and conditions to persuade the Government and its new Jobs Minister, Ged Nash, to take on extra budgetary strain to ease pressures for wage and cost of living increases.

Last week, Mr Nash said 2015 would be a positive year, adding: “People can expect to see improvements in their income.” There was an onus on profitable private sector companies where recovery had become embedded and who had not awarded pay rises for some years “to engage with their employees to ensure that they can enjoy the fruits of economic recovery”, Mr Nash said.

Public Expenditure Minister Brendan Howlin has made clear his intention to talk to trade unions in 2015 about pay issues, performance and productivity. This will involve a clawback of some of the cuts and levies introduced under the Croke Park and Haddington Road agreements. He also warned that more attractive pay and conditions being offered in part of the private sector for computer employees might have to be met in the public service. “Where the public sector is the leading or only, employer, say in teaching or policing, we have to set pay rates that will be sufficiently attractive to attract the necessary number of high-quality recruits, in particular graduates”, he said.

“Some pressures are starting to come through where private sector employers in Ireland are able to pay higher amounts for scarce or valuable skills. For some of our more mobile workforce - say, hospital doctors trained at state expense - we are competing with employers across the world” said Howlin. 

Siptu chief Jack O”Connor said: “An increase in wage claims will unfold and will reach a certain point and then become explosive.” He predicted there might not be a deluge of claims immediately but said the momentum was likely to build if unemployment continued to fall and the economy continued to grow.

“I think it’s fair to say this year as the economy recovers and unemployment diminishes that there will certainly be an increase in wage claims as people try to recover some of the ground they lost over the last six years of austerity,” Mr O”Connor added.

Richard Eardley, managing director of recruitment firm Hays Ireland, said: “Over 75% of employers plan to recruit next year and the skills gap is growing.” Hays” 2015 Ireland salary & recruiting trends survey indicates that three in five workers plan to change jobs in 2015 in search of higher wages - and that 58% of employers plan to offer pay rises to hold on to staff. He estimates that the average pay rise next year will be about +3.1%.

Neither trade unions nor employers seem in any hurry to get back into the national “social partnership” model that applied from 1987 to 2009.

But in other quarters, calls are being made to restore an element of partnership. The chief of the Labour Relations Commission, Kieran Mulvey, suggested plans needed to be made now for post-recession renewal.

He told a public affairs conference that what he was talking about was a “limited agenda on specific issues” including pay, pensions, employment law and institutional change. A return to an agenda of “sensible social partnership” would be a response by those in the centre to those on the “ultra-right and ultra-left” who were attempting to lead the agenda.