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Canadian employers are using bonuses to attract and retain employees in a difficult labour market, according to a new survey by Mercer.

Half (50 per cent) of respondents said they’re providing sign-on bonuses for select new non-executive hires. And while 55 per cent aren’t offering retention bonuses, 35 per cent said they’re being provided for a select non-executive positions. In addition, budgets for merit-based raises are projected at 2.6 per cent.

Respondents said they anticipate adjusting salary structures by an average of 2.2 per cent, with some variation based on the level of the grade or band, while no respondents indicated plans for a company-wide salary freeze.

Read: Employers offering mix of incentives, upskilling amid labour shortage: survey

About a third (35 per cent) of respondents said they’ve seen an increase in voluntary turnover compared to pre-pandemic levels and, of that group, 57 per cent said they believe turnover has increased across their entire organization.

Meanwhile, a separate survey by Willis Towers Watson found just four per cent of Canadian employers aren’t planning to increase salaries in 2022, down from 11 per cent that didn’t provide raises this year.

The survey found respondents projected average salary increases of 2.7 per cent for executives, management and professional employees and support staff — up from 2.3 per cent this year — while production and manual labor employees are expected to receive average increases of 2.6 per cent, up from 2.2. per cent.

Top performers continue to be rewarded with significantly larger pay raises than their average-performing peers, with top-performing management and professional employees receiving an average increase of 4.4 per cent this year, 83 per cent higher than the 2.4 per cent increases granted to those receiving average ratings.

Read: Wages set to rise 2.7% in 2022 as inflation hits new high, says survey

And another new survey by Robert Half Canada Inc. found 18 per cent of employees would consider quitting their job if they don’t get a raise by year’s end, a number that was even higher among generation Z (35 per cent) and millennials (28 per cent).

Half (50 per cent) of survey respondents said they’re earning less than they deserve, with millennial professionals (56 per cent) and women (54 per cent) the most likely to feel shortchanged.

And while about a third (35 per cent) of employers are offering signing bonuses to entice new hires, employees said the most important perk when considering a job offer is a flexible work schedule (75 per cent), followed by remote work options (61 per cent) and employee discounts (40 per cent).

In addition, 59 per cent of managers said they first look locally and then outside their city if it takes too long to find skilled candidates, while 17 per cent said they begin their search anywhere due to talent shortage. Roughly two-thirds (60 per cent) of companies hiring remote workers said they’re setting pay by office location, while 40 per cent said it’s based on the employee’s location.

Read: Sounding Board: How is teleworking during the pandemic impacting compensation practices?