Salaries in Canada Expected to Increase Slightly in 2015

By Roy Maurer Aug 12, 2014

Canadian employers expect salaries to rise by an average of 2.8 percent in 2015, according to HR consultancy Morneau Shepell’s annual Compensation and Trends in Human Resources survey report. This forecast is up slightly from the average 2.6 percent salary increase expected for 2014.

“Employers are relatively optimistic about the coming year,” Michel Dubé, a principal in Morneau Shepell’s compensation consulting practice, said in a news release. “Those expecting a significant increase in revenue, operating budgets and staffing outnumber those expecting decreases by four to one. Despite this optimism, employers are still cautious about the salary increases, which likely reflects reduced competitive pressures in an environment of relatively high unemployment and low inflation.”

SHRM Online recently reported that the average raise in base pay for 2015 in the U.S. is projected to be 3.1 percent.

The results of the Morneau Shepell survey showed higher-than-average expected salary increases in the mining, oil and gas sector (3.4 percent) and in the professional, scientific and technical services sector (3.0 percent), reflecting increased competition for talent.

Lower-than-average increases are expected in certain industry groups facing economic challenges, such as wholesale and retail trade; average salary increases of 2.4 percent are anticipated in those industries.

The survey was conducted between mid-June and the end of July 2014, with input from organizations employing 800,000 people in Canada and representing a broad cross section of industry sectors.

Companies to Invest in Training, Mental Health

About half of the survey respondents indicated that improving total rewards communication, training and development programs, and workplace health and well-being are priorities for 2015.

Workplace mental health is now the leading cause of sick leave and disability and is a growing concern, according to Morneau Shepell. The Conference Board of Canada estimates that mental illness costs employers more than $20 billion per year. Fifty percent of responding employers said they conduct mental health training for managers or were planning to implement such training in the next 12 to 18 months.

Organizations are also looking for ways to reduce costs and be more efficient. Priorities include finding ways to reduce sick leave and disability costs, and reducing the cost of benefits and retirement plans. About one-third of employers with defined benefit pension plans indicated they would be reviewing plan design or employee cost-sharing options, and about one-quarter said they would be looking at whether they should convert to defined contribution plans.

Roy Maurer is an online editor/manager for SHRM.

Follow him at @SHRMRoy

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