The good news? Salary budgets are increasing. The bad news? Employees won’t be pocketing as much as they thought.
Employers project base salary budgets will increase by 3.1% for next year, according to Mercer’s 2012 Compensation Planning Survey. This is a slight improvement over 2011’s projected increases (2.9%), but well below increases planned before the global financial crisis, when 4% was the projected 2008 base salary increase.
With a projected inflation rate of 2.6% in 2012, working Canadians will not be much further ahead.
According to Mercer’s recent What’s Working study of employee engagement, Canadian employees cite base pay as the most valued item in their employment agreement, ahead of bonuses, flexibility, training and career opportunities.
The survey also found that employees are increasingly disengaged: one in three is seriously considering leaving his or her organization and one in five is indifferent.
The same survey found that only half of employees are satisfied with their base pay and far fewer employees reported understanding how their pay is determined (74% now compared to 82% in 2006).
The current market turmoil will likely negatively impact the salary plans made by employers. Equally, global employers leveraged in markets experiencing acute financial pressures may exert downward pressure on subsidiaries operating in Canada.
“Canadian employers are starting 2012 with an increasingly disengaged workforce who are less informed about how their compensation is determined,” says Iain Morris, leader of Mercer’s Human Capital business in Canada. “Add to that a healthy dose of uncertainty in the markets and we see a challenging year ahead for Canadian employers.”
Mercer’s 2012 Compensation Planning Survey is available for purchase at www.imercer.ca.
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