Canadian salary increases led by energy sector

Canada’s energy sector continues to lead the country with the largest actual and projected increases year over year.

Mercer’s 2014/2015 Canada Compensation Planning Survey finds that salary increases in the energy sector are significantly higher than other industries at 3.9% in 2014 and projected to be 3.7% in 2015.

The transportation equipment, consumer goods and retail/wholesale industries are projected to see the smallest salary increases at 2.6%, 2.7% and 2.7%, respectively.

“This year’s results are not surprising,” says Allison Griffiths, Mercer’s Canadian workforce rewards practice leader. Over the last five years, the firm has observed a differential between the national projection and energy sector of approximately one percentage point. “When we remove the energy sector from the national sample, the average projected salary increase drops to 2.9%.”

The average raise in base pay in Canada is expected to be 3% in 2015, which is the same as this year’s actual increase. In Alberta, the raise in base pay is expected to be 3.2% in 2015, slightly lower than the 3.3% reported in 2014.

Executives and management have the highest salary increases in 2014 with 3.2% and 3.1%, respectively. All other employee groups are at or below the national average increase of 3%. Projections for 2015 indicate slightly less differentiation with increases ranging from 3% to 3.1%.

Canadian organizations are rewarding high performing employees with greater-than-average salary increases.

When employees were split into categories based on performance, the highest performers received an average 5% base salary increase in 2014, compared to 2.9% for middle performers and 0.3% for the lowest performers. This is expected to continue in 2015; Canadian employers are projecting a 5.2% salary increase for the highest-performing employees.

On a regional basis, Alberta has the highest projected average salary increases in the country (3.2%), followed by Saskatchewan at 3.1%. Comparatively, the lowest projected salary increase is in Quebec and Atlantic Canada each at 2.8%. The projected salary increase for 2015 for the Greater Toronto Area is 2.9%, while it’s 3% for the rest of Ontario, which is the same as the national average.

The survey, which has been conducted annually for more than 20 years, includes responses from almost 700 organizations across Canada and reflects pay practices for about two million non-union employees.

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