Canadian employers are expecting to increase base salaries by an average of 2.7 per cent in 2020, according to a new survey by Morneau Shepell Ltd.
This is up from an average realized 2.6 per cent increase in 2019. The 2020 forecast includes increases in salary structure, length of service, cost of living and merit pay, but excludes salary freezes and promotional adjustments.
“While the Canadian economy is projected to see slowed growth in the coming year, we’re expecting to see continued wage increases as a result of the tightening labour market,” said Anand Parsan, vice-president of compensation consulting practice at Morneau Shepell, in a press release. “Employers are optimistic about the anticipated growth in 2020. We have seen a steady rise in projected base salary increases over the past few years, with actual numbers equal to or above our forecast since 2017.”
Across Canada, some provinces are expecting higher than average salary increases in 2020, noted the report. In Newfoundland and Labrador, for instance, employers are expecting increases at 3.1 per cent, ahead of British Columbia (2.8 per cent) and Alberta, Ontario and Quebec (all at 2.7 per cent).
“As the war for talent continues and employees become more comfortable negotiating higher salaries and benefits, it’s critical that employers design robust compensation strategies to remain competitive,” said Parsan. “We have seen that the most successful employers are those who support the financial, mental, physical and social well-being of their people. By keeping employees healthy and happy, employers are well positioned to improve productivity and make a positive impact on the organization’s bottom line.”