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Aug 20, 2013

Employers scaling back salary increases for 2014: Survey

Raises will be smaller next year, but some provinces and sectors are bucking this trend
    
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Salary increases for 2014 are expected to be lower than 2013, according to a national survey of public and private sector employers.

The survey of more than 500 organizations by Hay Group pegged the average increase across Canada at 2.6 per cent for 2014, lower than the 2013 projection of 2.9 per cent. These numbers are very similar to what is expected south of the border, where an average of 2.8 per cent is predicted for American employees — which is also lower than one year ago.

The numbers are a far cry from raises Canadians were used to seeing before the 2008-09 economic downturn, said Hay, when increases in the 3.7 per cent range were the norm.

Resource sector has to budget the most

The highest increases for 2014 will be in the oil and gas sector. Firms are planning raises of four per cent, “despite the strategic issues in the industry that have caused some moderation in long-term investment,” Hay Group said.

Other sectors with above average increases include:

• services (3.3 per cent)

• credit unions (3.2 per cent)

• chemicals (3.1 per cent)

• utilities (3.0 per cent).

These high forecasts are a continued reflection of the demand for key skills and experience in those industries, Hay Group said.

The sectors with the lowest projections for 2013 are leisure/hospitality (2.0 per cent), retail, consumer durables and forestry and paper (all 2.1 per cent). Overall, the public sector is forecasting noticeably lower salary increases (2.3 per cent) than the private sector (industrial and financial at 2.7 per cent).

Highest increases in N.L., Saskatchewan and Alberta

Provinces with strong resource industries will see higher wage increases than the national average as well. Newfoundland and Labrador (4.0 per cent), Saskatchewan (3.4 per cent) and Alberta (3.2 per cent) are expected to lead the country, according to the survey.

That’s in stark contrast to the rest of the nation, where salary increases will come in at 2.1 per cent to 2.6 per cent.

Province

2014 projection

2013 projection

2012 projection

2011 projection

B.C.

2.3%

2.7%

2.5%

2.4%

Alberta

3.2%

3.6%

3.4%

2.9%

Saskatchewan

3.4%

3.2%

3.2%

3.3%

Manitoba

2.6%

2.7%

2.5%

2.7%

Ontario

2.5%

2.7%

2.7%

2.4%

Quebec

2.6%

2.7%

2.8%

2.7%

Maritimes

2.1%

2.6%

2.4%

2.7%

Newfoundland and Labrador

4.0%

3.4%

3.4%

3.5%

Greater Toronto Area

2.5%

2.8%

2.7%

2.5%

The global view

Canadians to fare better than some, but well behind other major economies, the survey found.

Canadian projections rank about average against some industrialized nations, such as:

• France (2.5 per cent)

• Italy (2.2 per cent)

• Japan (2.0 per cent).

But Canada trails behind other countries, including:

• United States (2.8 per cent)

• United Kingdom (2.9 per cent)

• India (10.8 per cent)

• China (9.0 per cent)

•Russia (8.0 per cent)

Projected versus actual for 2013

The actual base salary changes realized in 2013 were exactly as forecasted for the industrial (2.9 per cent) and public sectors (2.5 per cent) but lower in the financial sector (2.6 per cent realized against 2.9 per cent forecasted), according to Hay Group.

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