2014 Salary Increase Projections

Please find below a summary of recent Canadian survey findings* with respect to planned salary increases for 2014. 

Due to soft economic growth, Canadian organizations are planning moderate salary increases for the third year in a row.  We have still not returned to the level of raises Canadians were receiving before the 2008-09 economic downturn, when 3.7% increases were the norm.

Projected Pay Increases for 2014
•    Expected salary increases of 2.6–3.1% on average across Canada in 2014 (slightly lower than 2013 salary increases) 
•    Percentage of employers planning to implement a salary freeze continues to decline, most likely at least partially due to employer concern over employee turnover rates

Regional/Industry Differences
•    Highest increases in 2014 will be in the oil and gas sector with raises in the 4% range
•    Credit unions, chemicals and utilities all at 3.0% or more are higher than the national average
•    Manufacturing expects to maintain increases in line with the national average although some traditional sub-sectors are budgeting significantly lower salary increases
•    Conversely, sectors with the lowest projections, at 2.0-2.1%, are leisure/hospitality, retail, health, consumer durables and forestry & paper.
•    A clear divide between the provinces continues with the resource-rich provinces (Newfoundland and Labrador, Saskatchewan, and Alberta), buoyed by the demand for key skills in the resource industries, coming in between 3.2 – 4.0% with the rest of Canada predicting increases of 2.1-2.6%, all of them below the national average.
•    Increase for employees in the public sector is expected to be 2.7% while increase in the private sector is 3.0%

Variable Pay Programs
•    As companies continue to be conservative with their compensation budgets, a growing number of organizations continue to use variable pay programs, or performance-based awards that must be re-earned each year, to attract, engage and reward high performing employees.

*Annual projection of 2014 salary increase reports by Mercer, Morneau Shepell, Hay Group, WorldatWork, Aon Hewitt, Towers Watson and the Conference Board of Canada.

Note:
The numbers provided above are approximations only and are intended to provide you with a glimpse of what is happening in the marketplace today.  They should be used as general guidelines only. Your organization needs to consider your current financial, staffing and business situation when determining appropriate salary increase levels for 2014.

Please feel free to contact Faye at match@bm2b.ca with any questions or should you require assistance with your 2014 compensation planning.

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