Pay raises to average 2.79% in 2015

By Special to MoneySense on September 17, 2014
Estimated reading time: 2 minutes

8% of companies planning pay freezes

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TORONTO – A new study says that Canadians, on average, can expect about the same size salary increase next year as in 2014. Human resources consultants Pal Benefits says a survey of 401 organizations, mainly in Ontario, Alberta and British Columbia, projected salary increase for 2015 at an average of 2.79 per cent. That was almost unchanged from the 2.74 per cent average increase projected in last year’s survey. Meanwhile, in addition to the average salary increase remaining relatively steady year over year, the survey found that the percentage of employers who plan to freeze salaries appears to have stabilized at eight per cent —in the same percentages as was projected in 2014. Breaking down the numbers further, the survey found the average salary increase anticipated in the engineering, financial services and high technology sectors was three per cent. That compared with an average of 2.5 per cent on the low end for organizations in durable manufacturing. “Organizations appear to be staying the course when it comes to salary increases and freezes,” said Pal Benefits spokesman Steven Osiel. “However, it’s worth noting that there are more companies planning an increase of two per cent or more, as compared to last year’s survey — 43 per cent will be giving raises in the 2.6 to three per cent range,” he said. Osiel added that although Canadian companies say benchmarking and market position analysis are the top compensation priority, “it’s interesting that the most important factor when finalizing the annual merit budget is actually internal budget constraints.” “This may need to change to reflect the realities of retaining and motivating employees, which have been found to be the top organizational priority for 86 per cent of the companies that we surveyed. As more baby boomers retire and the talent pool shrinks, attracting new talent may become a priority in the near future.”