The desire to attract and retain the most productive employees is driving employers to project a national average salary increase of 3.9% for 2008, according to a survey by Mercer Human Resource Consulting.

“Oil and gas and petrochemical industries, mainly located in Alberta and accounting for just over 18% of all respondents, are projecting a 6.2% average salary increase. This projection is considerably higher than in other industries, so it exerts a strong upward pull on the national average,” said Iain Morris, a principal at the firm. “Without Alberta, the projected national average salary increase is closer to 3.5%.”

The Canadian Compensation Planning Survey finds that projected average salary increases vary considerably across other industries, with utilities at 4.8% and hospitality, entertainment and media at 3.2%. The vast majority of organizations are planning increases of between 3.1% and 4.0% across all employee categories.

“Organizations are putting more emphasis on pay for performance, increasing both the participation in and target levels in annual incentive plans,” says Morris. “The career component of the total rewards offer is also getting more attention with more than a quarter of survey participants planning on implementing formal career planning processes,”

The survey findings are based on data for the non-union employees of 491 organizations with a total workforce of more than 1.5 million unionized and non-unionized employees in Canada.

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