Salary budgets to increase 3.1 per cent for 2014: Mercer

Lowest gains in Quebec, Manitoba
|hrreporter.com|Last Updated: 08/27/2013

As the economy returns to full capacity, salary budget increases for Canadian employees are remaining steady, according to a survey by Mercer. The average raise in base pay is expected to be 3.1 per cent in 2014, a small decrease from the average actual salary increase reported both for 2013 and 2012 of 3.2 per cent.

The results are indicative of a flat-lining trend, said Mercer, and there are similar trends in the United States, with the average increase in base pay expected to be 2.9 per cent, modestly rising from 2.8 per cent in 2013 and 2.7 per cent in 2012 and 2011.

“While we are seeing a flattening in salary increases across the country, competitive industries and markets continue to recognize that in order to attract and retain top-performing employees, they’re going to have to reward them,” said Iain Morris, leader of Mercer's talent consulting business for central Canada. “This includes higher pay increases along with other non-cash rewards such as training opportunities and career development.”

Breakdown of results

Executives and management have the highest salary increases in 2013 with 3.4 per cent and 3.3 per cent respectively, found the survey of 719 employers across Canada (see chart below).

The oil and gas industry continues to have the highest salary increases in both 2013 (4.3 per cent) and projected for 2014 (4.2 per cent). The pharmaceutical and biotech, and wholesale/retail industries are projected to see the smallest salary increases at three per cent and 2.7 per cent respectively.

Alberta has the highest projected average salary increases in the country (3.2 per cent), followed by Saskatchewan at 3.1 per cent. Comparatively, the lowest projected salary increase is in Quebec, Manitoba and Greater Vancouver, each at 2.8 per cent, found Mercer’s 2013/2014 Canada Compensation Planning Survey.

Organizations are rewarding high-performing employees with greater than average salary increases. Using five performance categories, survey respondents rewarded the highest performers (six per cent of the workforce) with a 5.1 per cent salary increase in 2013, compared to 2.8 per cent for middle performers (60 per cent of the workforce) and 0.1 per cent for the weakest performers (two per cent of the workforce).

Average base pay increases by employee group

Actual 2013 (excluding zeros)

Actual 2013 (including zeros)

Projected 2014 (excluding zeros)

Projected 2014 (including zeros)

All employees

3.2%

3%

3.1%

3%

Executive

3.4%

3%

3.2%

2.9%

Management

3.3%

3.1%

3.3%

3.1%

Professional

3.1%

2.9%

3.1%

2.9%

Office/Clerical/Technician

3.2%

3.1%

3.2%

3%

Trades/Production/Service

3%

2.7%

3%

2.7%

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