Canadian employers plan to spend slightly more on salary increases in 2019, according to a recent survey that found average merit budgets increased to 2.6 per cent.
Mercer Canada determined that budgets for pay raises increased 0.1 per cent year-over year, and are projected to remain steady into 2020. The figures exclude organizations under salary freezes.
The human resources consulting firm’s 2019/2020 Canadian Compensation Planning Survey gathered data from 652 organizations, representing a broad cross-section of the economy.
“Getting compensation right is critical to your employee value proposition,” Gordon Frost, partner and career business leader at Mercer Canada said in a news release.
“When you have the right compensation strategy in place, you can bolster employee retention, and build a thriving workforce.”
Mercer Canada notes that prior to 2019, budgets for raises held steady at 2.5 per cent for three years. This year’s slight increase was driven by hot sectors like technology, which allocated 3.2 per cent to pay increases to retain top talent, the authors note.
The vast majority of employers surveyed said they plan to invest in salary increases, with only six per cent reporting salary freezes for executives and 4.8 per cent reporting freezes for non-executives.
In 2019, “high performers” were found to receive salary increases 1.85 times larger than “average performers.”
Participating employers said the top factors for 2020 compensation decisions are retention concerns (72 per cent), attraction concerns (70 per cent), and a desire to “strengthen a performance-based culture” (50 per cent).
Separate data from the U.S. human resources firm Ceridian found that pay is the top contributor to job unhappiness among Canadian and U.S. workers.
Their survey found 78 per cent are stressed about pay and money issues on a regular basis, 54 per cent believe their employer cares about their financial well-being, and 61 per cent say they are satisfied with their employer on compensation.