Canadian employers’ 2025 salary budgets are increasing by an average of 3.4 per cent, down slightly from 3.6 per cent in 2024, according to a new survey by Normandin Beaudry.
The survey, which polled more than 700 employers, found more than two-fifths (44 per cent) said they plan on granting an average additional budget of one per cent for the 2025 compensation cycle, unchanged from last year. Among other purposes, these budgets will be used to apply market-driven adjustments (65 per cent), retain employees in critical roles (51 per cent) and differentiate compensation for top performers (49 per cent).
Read: 36% of employers changing initial 2024 salary budgets: survey
Employers in the high technology sector are planning the highest average budget increase (4.3 per cent), followed by telecommunications and data processing/warehousing (3.9 per cent), professional, scientific and technical services (3.7 per cent), construction (3.6 per cent), computer design, security, information technology services and artificial intelligence (3.6 per cent), IT consulting services (3.5 per cent), energy, mining and metals (3.5 per cent) and foundations, community assistance and health care (3.5 per cent).
“While economic pressures and the competition for talent remain challenging, we’re beginning to see a gradual return to pre-pandemic market norms as salary increase budgets reduce for a second year in a row,” said Darcy Clark, senior principal in compensation at Normandin Beaudry, in a press release.
“Although average salary increase projections remain above three per cent, organizations are considering affordability when defining their long-term plans. Several significant salary increase cycles may not be sustainable and organizations remain cautious about increasing recurring payroll costs as they plan for the future.”
Read: Canadian employers projecting smaller compensation increases in 2024: survey