Canadian employers digging deep, with highest raises in two decades expected: Salary survey
Canadian employers are digging deep into their pocketbooks when it comes to raises this year, according to a recent salary survey.
Eckler found that employers across the country are projecting the highest salary increase in two decades, with the average base salary projected to rise 4.2 per cent in 2023.
This number parallels 2022 increases, excluding planned salary freezes, the company said. Though only one per cent of respondents reported plans for a salary freeze next year.
“Salary planning for 2023 has been rife with complexity. We are seeing the highest projected salary increase in two decades as organizations try to balance the impact of rising inflationary pressure and a tight labour market against a backdrop of surging interest rates and anticipated economic downturn,” said Anand Parsan, national compensation practice leader at Eckler. “Based on actuals seen in 2022, time will tell if the 4.2 per cent will remain constant or push higher as organizations weigh their budget and talent management needs.”
Show me the money
The survey results show that Canadian organizations are planning to use compensation as a key part of their talent management strategy as they look to regain some certainty.
Parsons said that while the conservatism shown by employers during the pandemic is over, there are a surprising number (44 per cent) of organizations that remain undecided about salary budgets despite red-hot inflation and a tight labour market.
“Perhaps this ‘wait and see’ approach is another attempt to gain some certainty as they look to what their competitors are doing,” he said.
Key results by province and industry:
- British Columbia, Ontario and Quebec are projecting the highest average salary increases at 4.1 per cent.
- The lowest anticipated salary increases range from 3.2 per cent to 3.5 per cent for the Yukon, Nunavut and Prince Edward Island respectively.
- The highest projected average salary increases by industry are expected to be in information technology (5.4 per cent), membership organizations/professional associations (5.3 per cent), media & telecommunications (5.1 per cent), and construction (5.1 per cent).
Education (2.5 per cent), health care (2.7 per cent), agriculture (3.4 per cent) and hospitality (3.5 per cent) reported the lowest projected salary increases.
Beyond salary increases
Money counts for a lot, but there are other areas where organizations can make a real difference in recruitment and retention.
“If you want to become an ‘employer of choice’, the employment offer will need to be more holistic,” said Chris Brisebois, who leads Eckler’s largest pension and benefits consulting practice.
According to the survey results, human resource (HR) priorities for the next 12 months will indeed be focused on broader initiatives. The top HR initiatives reported include:
- Diversity, equity and inclusion initiatives (32 per cent)
- Compensation (31 per cent)
- Talent retention (31 per cent)
- Employee engagement (25 per cent)
“We were not surprised to see that organizations are focused on initiatives like DEI, talent retention and engagement because many organizations are struggling with similar issues right now,” Brisebois said. “What will set an organization apart is a comprehensive total rewards strategy that supports each of these objectives while also meeting the needs of a diverse workplace.”
Eckler’s Compensation Planning Survey was conducted from July to August 2022 and collected responses from 269 Canadian organizations across diverse sectors and industries.
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