The average Canadian employer is planning to increase their salary budget by 3.5 per cent in 2026, according to a new survey by WTW.
The survey, which polled more than 29,000 employers across 157 countries, found the majority of companies said they’re planning an increase of between 3.2 per cent and 3.6 per cent. Notably, employers in Brazil, China and Saudi Arabia are planning average increases of 5.8 per cent, four per cent and 3.9 per cent, respectively.
Read: 64% of Canadian employees want higher salary for their position: survey
A possible recession and weaker financial results (38.9 per cent) was the No. 1 factor impacting salary budgets among all employers, followed by cost management concerns (34.4 per cent) and inflation (27.4 per cent).
The survey also noted amid a competitive labour market and rising inflation, employers are increasingly looking to compensation to attract and retain talent. Roughly a third of all employers said they’ve undertaken a full compensation review of all employees (31.2 per cent) or a specific group (30.1 per cent), while 27 per cent said they’ve increased starting salaries for new employees.
About a fifth of employers said they’ve hired employees who command a higher salary (21.5 per cent), have increased their use of retention bonuses (21.5 per cent) and increased base salary for specific employee groups (20.3 per cent). Just 7.5 per cent said they’ve increased base salaries for all employee groups.
Read: Canadian employers project average base salary increase of 3.6% in 2025: survey