While merit increases offered by Canadian employers remain above inflation and are still higher than pre-coronavirus pandemic times, they’re continuing to trend downward in the first quarter of 2024, according to a new survey by Mercer Canada.
The survey, which polled more than 400 employers, found the average national merit increase was 3.2 per cent, slightly above November 2023 projections (3.1 per cent); however, the average total increase budget was 3.5 per cent, slightly lower than the projected 3.6 per cent. On average, employers said they plan to promote just eight per cent of employees, down slightly from 8.1 per cent last year.
Read: Canadian employers projecting smaller compensation increases in 2024: survey
Half (48 per cent) of respondents said they’re giving off-cycle increases on an as-needed basis for a variety of reasons, including, but not limited to, promotions, retention concerns, internal equity and market adjustments. Fewer than a fifth (15 per cent) of employers said they have a dedicated time during the year for off-cycle increases.
The survey also noted two-fifths (41 per cent) of employers that operate in multiple locations use a national approach to pay versus implementing geographic differentials. Three-quarters (72 per cent) of employers that use geographic differentials said they have a national salary structure for all employees and use geographic variations of the structure to account for locations with varying costs of labour.
Read: 74% of U.S. employers increasing benefits, compensation communications: survey