Canadian employers are projecting an average base salary increase of 3.6 per cent in 2025, a percentage that increases to 3.9 per cent among British Columbia-based employers, according to a new survey by Eckler Ltd.
The survey, which polled 500 Canadian organizations across several sectors and industries, found while the average increase is lower than last year’s (3.8 per cent), just 18 per cent of organizations remained undecided about 2025 salary budgets, compared to 58 per cent in 2024.
Some sectors continued to report limited budgets and are projecting compensation freezes in 2025, including participating health-care organizations (44 per cent) and education organizations (21 per cent).
Read: Canadian employers projecting smaller compensation increases in 2024: survey
Alberta-based employers (3.6 per cent) had the second-highest average projected salary increase, while those in Yukon and Prince Edward Island reported the lowest (3.1 per cent and 3.2 per cent, respectively). All other provinces forecasted average increases ranging from 3.3 per cent to 3.5 per cent.
By industry, the highest projected average salary increase was in real estate (4.2 per cent), while the health-care (2.8 per cent) and education (2.9 per cent) sectors reported the lowest projected increases, even with projected freezes removed.
When asked about their top human resources initiatives for 2025, more than half of respondents cited current job descriptions (56 per cent) and salary benchmarking (55 per cent), followed by enhancing total rewards strategies to be more well-rounded, flexible and employee-centric (47 per cent), conducting and/or producing more resources and education training on compensation for people leaders (36 per cent), adopting a new or enhanced human resources information system (32 per cent) and conducting a pay equity analysis (31 per cent).
“As inflationary pressures dissipate, planned salary increases are moderating more slowly, resulting in larger real compensation increases for employees,” said Anand Parsan, Eckler’s national compensation practice leader, in a press release. “As the labour market continues to rebalance, organizations are shifting their attention towards effectively managing their compensation programs — how they communicate their total rewards package to employees, how transparent they are with compensation [and] how effective and equitable their pay programs are.”
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