Alberta continues to lead wage growth

Predictions range from 3.66 per cent to 3.8 per cent for 2013 salaries in province
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 10/23/2012

As an engineering major in the University of Calgary’s chemical petroleum program, Gail Evans’ daughter will have no trouble finding a job with a healthy salary once she graduates. That’s because Alberta’s natural resources base is booming once again, says Evans, president of the Wynford Group in Calgary.

The oilsands are leading the charge, but peripheral work in services and construction are also having an impact, she says. And looking ahead to 2013, Canada’s compensation outlook will once again be led by Alberta’s booming economy.

“The good news is there is also positive impact in other parts of the country, certainly in Ontario, to do with the provision of other types of services and goods,” says Evans.

“And because we’re seeing the beginning of a shortage of skilled workers again, we certainly expect salary increases to go up.

“In general, the resource-driven economy we’re experiencing right now is positive for all of Canada, not just the provinces where the core activity is taking place.”

Alberta is expected to see a base salary adjustment of 3.66 per cent next year, along with a salary range adjustment of 3.21 per cent, according to the Wynford Group’s survey of about 150 employers.

Typically, these projections are conservative and the increases for the oil and gas sector are around 4.5 per cent, says Evans, while areas such as engineering, procurement and construction are close, at 4.25 per cent.

Saskatchewan and Newfoundland and Labrador also have strong resource bases that will drive increases, says Evans, along with mining in British Columbia.

For the rest of Canada, Saskatchewan comes in with the second-highest predictions for 2013 (3.3 per cent for base salary and 2.76 per cent for salary range), followed by Manitoba (3.22 and 2.65, respectively), B.C. (3.19 and 2.78), the Atlantic provinces (3.13 and 2.61), Ontario (3.11 and 2.61) and Quebec (2.97 and 2.52), found the survey.

Overall, Canada is expected to see an increase of 3.23 per cent for base salary and 2.74 per cent for salary range.

Actual numbers for Alberta in 2012 were 3.64 per cent for base salary and 3.13 per cent for the salary range, found the Wynford Group. That’s higher than actual increases for Saskatchewan (3.39 and 2.88), B.C. (3.27 and 2.78) and Manitoba (3.2 and 2.66).

In the East, the numbers were even lower, with the Atlantic Provinces seeing actual increases in 2012 of 3.19 per cent for base salary and 2.6 per cent for salary range. Ontario saw 3.18 per cent and 2.64 per cent, respectively, and Quebec saw 3.06 per cent and 2.61 per cent, respectively.

Aon Hewitt pegs national average at 3.1 per cent

Average salary increases in 2013 will be 3.1 per cent across all employee groups and industries, according to Aon Hewitt’s 34th annual Canada Salary Increase Survey. That’s a slight improvement over last year’s actual increases, which averaged three per cent.

“Employers are cautiously optimistic about the overall Canadian economy,” says Suzanne Thompson, a senior associate at Aon Hewitt in Toronto. In 2007 and 2008, the averages were anywhere from 3.6 per cent to four per cent, she says, “so they really did drop quite significantly in 2009 and they’ve been slowly creeping up. So that’s good news.”

Alberta and Saskatchewan have projections of 3.8 per cent and 3.9 per cent, respectively, found the survey of 422 employers.

“Of course Alberta, with its predominance of oil and gas, always has an impact, and obviously creates some hot pockets as well in that region,” says Thompson, citing busy locations such as Fort McMurray, Alta., Calgary and Edmonton, along with Saskatoon.

When it comes to hot spots, employers are looking to further entice and retain employees through special compensation arrangements.

“What they were looking at there were housing subsidies, allowances or loans, recognition of the increased cost of living through additional allowances,” she says.

For non-monetary rewards, flexible work arrangements are most common, says Thompson, such as compressed workweeks or hours, along with assistance in locating housing, additional vacation time and perquisites.

“Many hot locations tend to be somewhat remote, so the ability to travel home was also seen as valuable,” she says.

As for hot skills, the most common enticements are increases to base pay, enhancement of annual bonuses, sign-on and project completion bonuses, and an increase in long-term incentives, says Thompson.

Employers still exercising caution: Conference Board

More than one-half of employers responding to the Conference Board of Canada’s survey use some type of special compensation strategy to attract and retain employees, according to Alison Cowan, senior research associate at the Conference Board in Ottawa. One of these would include hot skills bonuses, which are used by 16 per cent.

Overall, employers are exercising caution, with predictions of three per cent for overall average base pay in 2013, found the survey of 392 employers.

“That said, three per cent increases do vary by region and industry,” she says. “We are seeing in Alberta and Saskatchewan that the increases do exceed the national average, and that’s driven by the resource sector and tight labour markets that we’re seeing in parts of the West.”

Alberta is expected to see an overall average salary increase of 3.8 per cent in 2013, while Saskatchewan is close behind at 3.7 per cent, found the Conference Board.

Further back are Manitoba and the Atlantic provinces (three per cent each), Quebec (2.9 per cent), B.C. (2.8 per cent) and Ontario (2.7 per cent).

And when it came to actual increases to average salaries for 2012, Alberta and Saskatchewan were tied at 3.9 per cent, followed by Manitoba at three per cent, B.C. at 2.9 per cent, Quebec at 2.8 per cent, Ontario at 2.7 per cent and the Atlantic provinces at 2.5 per cent.

By industry, oil and gas is leading the way, with predicted increases to average salary of 4.2 per cent in 2013, followed by natural resources excluding oil and gas at 3.6 per cent, services (professional, scientific, technical) at 3.5 per cent and construction at 3.3 per cent.

Overall, there is very little difference between 2012 and 2013 salary increases over all industries and sectors, says Cowan.

“The message is that (employers are) holding steady and planning moderate increases, waiting to see if anything’s going to change. But, really, there’s no indicators at this point that big changes are ahead in the near future, until we see the labour market shifting.”

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