Canadian employers are being cautious about budgeting for salary increases in the coming year, according to a new survey by Mercer. It predicts average raises will be just 2.6 per cent across all employee groups.

When taking anticipated salary freezes into account, the survey expects overall salary increases in 2017 will be even lower at 2.3 per cent. In fact, organizations in Alberta are projecting salary increases below the national average, partly because 40 per cent of energy organizations surveyed intend to freeze salaries in 2017.

Read: Average starting pay for professionals to rise by 3.1%: Robert Half

Employers with small budgets need to creatively address small salary increases to employees within their organizations, noted Allison Griffiths, principal at Mercer Canada at a compensation planning seminar in Toronto today. “It’s a tough process and they need to think strategically. Why do people come to work? Money alone won’t retain top talent … there’s other stuff on the table.”

Millennials, a group known for valuing career prospects, often wonder how they could advance professionally within an organization, said Griffiths. “By articulating [potential opportunities], you might make up for the low increases you’re giving them.”

Read: Predictions for 2017 salary increases lowest ‘in more than two decades,’ survey finds

The survey found that organizations intend to continue providing top performers higher-than-average salary increases. The average salary increase for the top seven per cent of workers in 2017 is is 4.3 per cent.

In these circumstances, people skills are essential to maintaining employee morale, said Griffiths. The key is to make sure managers are equipped, as some may be initially uncomfortable with having difficult conversations about pay.

Copyright © 2021 Transcontinental Media G.P. Originally published on benefitscanada.com

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