Half (48 per cent) of Canadian employers say they’re increasing their salary budget for 2023, according to a new survey by Normandin Beaudry.

The survey, which polled more than 440 employers, found two-fifths (43 per cent) of respondents said they’ve earmarked an average of 1.2 per cent in additional funds for salary increases. Among the main reasons for increasing salary budgets, respondents cited market adjustments (76 per cent), retention of strategic or critical roles (60 per cent) and retention of employees at risk of leaving (51 per cent).

Read: Employers increasing salaries due to inflation, labour market challenges: survey

The survey respondents said they’re forecasting an average budget increase of 4.7 per cent to accommodate salary increases in 2023. Employers in Quebec and Ontario (5.1 per cent and 4.7 per cent, respectively), as well as privately-held businesses and not-for-profit companies (five per cent and 4.8 per cent, respectively), are forecasting the highest budget increases.

“Despite volatile economic conditions, organizations are continuing to invest in their pay raise budgets to adapt to an extremely competitive job market,” said Darcy Clark, senior principal for compensation at Normandin Beaudry, in a press release.

Read: Canadian employers planning average salary increase budgets of 3.8%: survey