The vast majority of Canadian employers are increasing salaries amid a challenging labour market, according to a new survey by Normandin Beaudry.
The survey, which polled 285 Canadian employers, found fewer than 0.5 per cent were planning a salary freeze for 2022 in the late fall of 2021, down from three per cent in the summer of 2021. Half (50 per cent) said they’re increasing salaries because of inflation and 40 per cent said they’ve earmarked an average of 1.2 per cent in funds for additional salary increases for key employees.
Read: Fewer companies planning 2021 salary freezes than last summer: survey
The survey respondents said they’re forecasting an average budget increase of 3.7 per cent to accommodate salary increases in 2022. Employers in Quebec and Ontario (4.1 per cent and 3.8 per cent, respectively), as well as privately-held businesses and not-for-profit companies (4.1 per cent and 3.9 per cent, respectively), said they’re forecasting the highest budget increases.
In a press release, Manny Campione, principal for compensation and performance at Normandin Beaudry, said the survey’s results indicate that employers plan to use salary increases as a crucial part of their talent management strategy, to both attract and retain employees given the extremely competitive job market.
“In fact, more than 50 per cent of companies plan to use this additional budget to retain key employees in critical roles, while almost all the remaining plan to use it to differentiate compensation for high performers.”