Canadian base salaries are set to increase by four per cent in 2023, a percentage that’s comparable to 2022, according to a new survey by LifeWorks Inc.
The survey, which polled more than 500 Canadian employers, found while roughly six per cent of organizations froze their base salaries in 2022, fewer than two per cent plan to freeze base salaries in 2023. In addition, 18 per cent of respondents implemented a salary range structure freeze in 2022, but only seven per cent plan to freeze their salary range in 2023.
Read: Canadian employers planning average salary increase budgets of 3.8%: survey
Two-thirds (65 per cent) of organizations cited a rise in compensation costs caused by external market pressure as an impact of inflation and labour shortages, while 58 per cent cited the need to adjust the salaries of current employees to be equitable with new hires.
More than two-fifths (44 per cent) of organizations noted increased challenges in controlling their salary budgets and 28 per cent reported additional challenges in achieving financial objectives.
“Last year, we projected base salary increases of 2.67 per cent,” said Al Kiel, senior partner of retirement and financial solutions at LifeWorks, in a press release. “In fact, the actual base salary increases were 4.01 per cent. This demonstrates that Canadian organizations adapted to many challenges such as market pressure, inflation and labour shortages.
“As we look toward 2023, we anticipate a continued rise in the average base salary in an effort for employers to attract, retain and empower talent to drive business results.”
Read: Canadian employers increasing salary for current staff to help close wage gaps: survey