Salary increases will depend more than ever on what province employers are based in, according to Morneau Sobeco’s 25th Annual Compensation and Trends Projection Survey.
The average salary increase budget of Canadian employers for 2008 is 3.7%, including a provision for promotional increases.
After hitting a five-year high last year, salary increases are projected to stabilize across most of the country. Nationally, the average salary increase expectations vary from 3.1% for operation and production staff to 3.4% for executives before promotional increases.
The highest salary increase expectations are reported in Alberta. Average expected increases range from 4.3% for operation and production staff to 5.6% for executives before promotional increases.
Salary increases in Western Canada are being driven by a demand for staff. One-third of survey participants in that part of the country are looking to significantly boost staff levels next year.
In contrast, less than 10% of participants in Central Canada plan to significantly ramp up their staff levels.
About 75% of respondents in Western Canada—and approximately 50% of those in Central Canada—say hot skills recruitment is one of their key HR issues. “People with specialized skills or in trades are in high demand,” says Gord Simle, a partner in Morneau Sobeco’s Calgary office.
The highest salary increase expectations in Canada are reported by companies in mining and gas extraction, with average expected increases of 4.3% for all job categories excluding promotional increases.
Companies that make paper or wood products reported the lowest salary increases, with average increases ranging from 1.7% for operation and production staff to 2.1% for executives.
The top benefit issues for employers in 2008 continue to be healthcare costs and disability management. Still, the proportion of employers reporting healthcare costs as a key benefit issue has fallen to about 45% from almost 60% two years ago as healthcare cost increases have generally trended lower.
Also, nearly 10 percent of employers with defined benefit plans said their pension plans have been closed to new employees in the past two years and a similar proportion indicated that their plan will likely be closed to new employees next year.
The survey was conducted across Canada, covering 335 organizations with more than 900,000 employees.
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