Average salary increases of 2.4 per cent in 2016: Survey

Oil and gas projected to see lowest pay increases
|hrreporter.com|Last Updated: 08/27/2015

Canadians can expect to see average base salary increases of 2.4 per cent in 2016, according to a national survey of more than 525 Canadian public and private sector employers conducted by Hay Group in June and July.

The projection is lower than the 2.6 per cent projection for 2015, continuing a downward trend in Canadian salary increases that has developed since the start of the economic downturn in 2008-09.

Salary projections for the United States remain the same as for 2015 (three per cent).

Seventy per cent of Canadian employers are forecasting they will provide employees with base salary increases in 2016, which is significantly less than the 83 per cent of employers that projected increases for 2015. This is due to continued economic uncertainty across many sectors in the Canadian economy and to the fact that more employers are now adopting a "wait and see" position before increasing their budgets, said Hay Group.

Resource-based provinces now behind

With the economic impact of collapsing oil prices over the last year, oil and gas workers are now projected to receive the lowest increases in the country, at 1.5 per cent, as employers shed jobs and the labour supply now exceeds demand.

Credit unions (three per cent), leisure and hospitality (three per cent) and insurance (2.9 per cent) will lead all sectors with forecasts higher than the national average of 2.4 per cent, found the survey.

Saskatchewan (2.7 per cent) and Alberta (2.5 per cent) still lead the country with projected overall base salary increases higher than the national average (2.4 per cent). However they are significantly lower than in recent years, due mainly to the global softening in commodity prices, particularly in the Alberta oil and gas sector.

Unless there is an unforeseen jump in demand from the major oil and gas importing economies such as China or the European Union, or a choking off of supply by OPEC, principally through Saudi Arabia, then this year's results will turn from a blip into the new norm for Alberta, said Hay Group.

Province

2016

projection

2015

projection

2014

projection

2013

projection

2012

projection

2011

projection

B.C.

2.3 per cent

2.6 per cent

2.3 per cent

2.7 per cent

2.5 per cent

2.4 per cent

Alberta

2.5 per cent

3.1 per cent

3.2 per cent

3.6 per cent

3.4 per cent

2.9 per cent

Saskatchewan

2.7 per cent

2.9 per cent

3.4 per cent

3.2 per cent

3.2 per cent

3.3 per cent

Manitoba

2.5 per cent

2.3 per cent

2.6 per cent

2.7 per cent

2.5 per cent

2.7 per cent

Ontario

2.5 per cent

2.5 per cent

2.5 per cent

2.7 per cent

2.7 per cent

2.4 per cent

Quebec

2.5 per cent

2.6 per cent

2.6 per cent

2.7 per cent

2.8 per cent

2.7 per cent

Maritimes

1.9 per cent

2.1 per cent

2.1 per cent

2.6 per cent

2.4 per cent

2.7 per cent

Newfoundland

2.3 per cent

2.6 per cent

4.0 per cent

3.4 per cent

3.4 per cent

3.5 per cent

GTA

2.5 per cent

2.5 per cent

2.5 per cent

2.8 per cent

2.7 per cent

2.5 per cent

Looking at the 2016 projections for major Canadian cities, workers in Edmonton are projected to receive increases of 2.9 per cent, followed by Regina at (2.6 per cent) and the GTA, Saskatoon, Winnipeg and Ottawa at 2.5 per cent.

Other findings

· For all organizations, actual base salary changes realized in 2015 were 2.2 per cent, lower than the 2.6 per cent projected in the survey as the economic performance across Canada has not lived up to predictions.

· By job level, most positions will be at or above the national average of 2.4 per cent. Only unionized clerical/operations positions will see average increases (2.2 per cent) below the national average.

· Projections for countries such as U.S. (three per cent), the United Kingdom and Australia (2.5 per cent) and Canada (2.4 per cent) continue to lag behind those for India (10.8 per cent), Brazil (7.0 per cent) and China (preliminary results show 7.6 per cent).

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