Canadian organizations are planning moderate base salary increases for the third year in a row, according to the Conference Board of Canada.
The average pay increase for non-unionized employees is projected to be 2.9 per cent in 2014, almost exactly in line with actual gains made last year.
"While Canada's economy is in relatively good shape, growth has been sluggish. For the most part, organizations will be looking to control costs and carefully allocate their compensation dollars," said Ian Cullwick, Conference Board vice-president of leadership and human resources research. "The divide between East and West persists. Frenzied resource development and near bottom unemployment rates means that Alberta and Saskatchewan are again expecting to offer the highest pay increases next year."
The following are some highlights from the report:
• The highest average increases are in the oil and gas sector at 4.1 per cent
• The lowest average increases will be in the health sector at 1.8 per cent
• The highest pay increases are expected in Alberta and Saskatchewan at 3.7 per cent
• The lowest average increases are expected in the Atlantic provinces at 2.5 per cent
• The second lowest average increase is expected in Ontario at 2.6 per cent.
Nationally, 58 per cent of organizations reported challenges recruiting and/or retaining employees, a decline from 69 per cent in 2012.
Organizations in Alberta and Saskatchewan face a different set of challenges than those of the rest of the country — a full three-quarters of organizations said they struggled to attract and retain talent. In the oil and gas sector, 81 per cent of respondents reported recruitment and retention challenges.
The expected increase in the private sector is three per cent, while the average increase for employees in the public sector is expected to be 2.7 per cent.
Short-term incentive pay practices are widely used across most industry sectors. Actual short-term incentive payouts exceeded targets last year, according to the Conference Board. In 2013, payouts were 11.6 per cent of total base pay spending versus a planned target of 11 per cent. Short-term incentive targets for 2014 are similar to 2013 targets. The highest short-term incentive pay targets will be in the oil and gas sector at 16.6 per cent.
The findings are based on the responses of 411 organizations across Canada. The survey was conducted between June and August.
© Copyright Canadian HR Reporter, HAB Press. All rights reserved.