90% of HR leaders worried about employee retirement readiness

A significant number of employers are expressing concern about employees’ readiness for retirement, a new survey by Morneau Shepell Ltd. has found.

Conducted in July 2017, the annual survey of human resources trends questioned 370 employers across Canada about their attitudes towards retirement. The results show that more than 90 per cent of human resources leaders are concerned about employees’ level of preparedness for retirement, particularly as more people are in defined contribution as opposed to defined benefit pension plans.

The survey found that, to help plan members attain a more comfortable future, employers are offering some solutions. Fifty-eight per cent of those surveyed offer assistance by providing better education for their employees; 27 per cent offer decumulation options upon retirement; and 23 per cent offer insurance at a discount.

The 35th instalment of the survey also quizzed Canadian employers about their salary expectations for 2018.

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“Employers are relatively optimistic about the coming year,” said Michel Dubé, a principal in Morneau Shepell’s compensation consulting practice. “Those expecting better financial performance in the coming year outnumber those expecting weaker performance by four to one.”

Next year, employers expect to see an average salary increase of 2.3 per cent. Some industries are expecting an even higher increase in 2018. Utilities can expect to see the highest salary increases at 2.9 per cent, with manufacturing and wholesale trades, as well as finance and insurance, coming next at 2.7 per cent.

Although many industries are likely to experience higher-than-average salary increases next year, employers are still cautious about the prospects for 2018. “Despite this optimism, employers are still cautious about salary increases, perhaps reflecting a concern that rising interest rates may dampen economic growth next year,” said Dubé.

Industries with more uncertain economic circumstances will see less generous salary increases. For example, the survey predicts salary increases for the mining and oil and gas industries will average 0.8 per cent.

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As for the different regions, the survey expects salary increases in Alberta and Prince Edward Island will be the lowest at 1.8 per cent and 1.9 per cent, respectively. Quebec leads the provinces at 2.6 per cent.