Salary Increases 2015
Canadian employers are experiencing challenges in attracting and retaining employees according to the results of a survey recently completed by Western Compensation & Benefits Consultants. Barry Cook, a Partner in the Firm, indicated that “in the past 12 months approximately 60% have experienced challenges in attracting employees, while nearly 40% of employers experienced challenges in retaining employees. Voluntary turnover was typically between 5% and 10% of employers’ workforces.”
Attracting, developing and retaining good employees is obviously a top human resources priority, and employers indicated that they consider the provision of competitive compensation to be the most effective strategy to meet this priority. Providing career development and advancement opportunities was identified by employers as another significant factor in attracting, engaging and retaining employees.
Salaries continue to increase. The consultants’ survey shows that salaries went up approximately 3% nationally in 2014 and are projected to increase by a similar amount in 2015. Over 90% of employers review and increase their salaries annually, and over one-half of employers implement these increases in the first calendar quarter.
However, Cook points out that “the magnitude of salary increases varies by sector of the economy, geographic region and industry.” Increases by public sector/government organizations were less than 2% in 2014 and not expected to be much higher in 2015. Salary increases by private sector companies in Alberta and Saskatchewan will continue to be higher than those awarded in other parts of the country. Industries which expect to provide the highest increases in 2015 include financial services companies and professional services organizations, while companies in the retail, wholesale and hospitality industries expect to grant the lowest increases.
Nearly three-quarters of the employers surveyed award larger salary increases to high performing employees. Typically, high performers receive increases of 1½% to 2% more than those awarded to average performers.
Short-term incentive or bonus plans continue to be a favoured strategy for engaging and rewarding employees, particularly in the private sector. In the last fiscal year, nearly 80% of the organizations surveyed by the consultants paid out bonuses. A majority of these organizations also expect to pay bonuses for the current fiscal year.
Compensation research reports recently released by WCBC contain a wealth of information to assist employers in their compensation and benefits planning. Over 500 organizations contributed data regarding employer policies and the compensation paid to nearly 400 positions. For more information please visit our published surveys page.