Canadian employers said they expect salaries to increase from just over two per cent in 2021 to about three per cent in 2022, according to a new survey from Willis Towers Watson.
The survey of employers around the globe found salary increases in 2022 are projected to be higher than in 2021 among the respondents, as these companies are going through extensive planning this year and will be experimenting with hybrid work models, which better fit employees’ lifestyles and may result in long-term business savings.
The buyout economy, long-term savings from hybrid work models and a booming job market have all led to forecasts for higher 2022 salary increases, said the survey report, as all (100 per cent) of the North American respondents said salaries are expected to grow next year.
Additionally, recruitment has exploded in recent months, found the survey. Of the respondents, 47 per cent indicated their rate of recruitment currently far outpaces their 2020 efforts. It also found organizations that stalled hiring last year are now starting to actively and aggressively recruit. “If demand for labour remains high and supply growth is sluggish, we would expect organizations to feel the pressure to increase compensation to attract the employees they need,” said Rich Luss, a senior economist at Willis Towers Watson, in the survey report.
Global salary increases in 2021 were higher than the year prior and have surpassed forecasts, said the report. Most of the company respondents were able to give higher than forecasted salary increases this year, largely due to lower operating costs and an economy that has been better insulated than expected, noted a report on the survey’s findings. And the survey found many of the respondents are awarding high salary increases to acknowledge and reward their employees’ resilience throughout the coronavirus pandemic.
Indeed, 51 per cent of companies surveyed globally are reporting better than expected performance in 2021. As a result, the survey noted the higher salaries were partially attributable to fewer of the respondents freezing pay increases compared to in 2020. Last year, the report found an unprecedented number of companies cancelled salary reviews (15 to 20 per cent), whereas in 2021 the figure returned to historic levels (two to five per cent).