More than one in four employers plan to give workers a pay rise this year amid continuing confidence in the economy, according to a new report.
The Recruitment and Employment Confederation (REC) said two out of five firms have not made a decision on wages yet, while one in seven do not plan to increase salaries.
A survey of 600 employers showed that three out of four planned to increase staffing in the coming months and half will increase their use of temporary workers.
REC chief executive Kevin Green said: "Employers are more able to find cash to reward staff as the economy picks up and confidence grows. We also know starting salaries for new joiners and hourly pay rates for temporary staff have increased sharply at the start of 2014. With inflation coming down, this all points to the squeeze on peoples' pockets beginning to ease.
"Another factor for employers will be the growing scarcity of skilled candidates. As that becomes more apparent in a range of sectors from white collar IT and management roles, to drivers and caterers,
businesses will be keen to do what they can to hang on to the staff they have."