Canadian businesses are planning somewhat conservative salary increases for 2014, with an average increase of 2.74 per cent, according to the Pal Benefits 2014 Salary Budget Report.
That number is lower than the projected increase for 2013 — which came in at 2.84 per cent — suggesting a cautious approach in the face of economic uncertainty.
But while that increase estimate is lower than last year’s, the percentage of employers that planned to freeze salaries declined, down to eight per cent in 2014 compared to 16 per cent in 2010.
That decreasing trend in salary freezes could be at least partly due to employer concern over turnover rates, the study suggested.
“Respondents indicated that concern over employee turnover is higher this year than it was at this time in 2012,” said Steven Osiel, vice-president of total compensation at Pal Benefits. “A third of respondents (33 per cent) experienced turnover in the 5 to 10 per cent range, up from 29 per cent last year. This increase could explain why fewer companies plan to freeze salaries in 2014 and why smaller organizations are planning to increase pay to a more competitive level.”
Additionally, employee retention was the top organizational priority for almost one-half (49 per cent) of respondents.
Interestingly, the 2014 survey also revealed that small employers plan to give the highest salary increases, with organizations with fewer than 100 employees providing an average increase of 2.8 per cent.
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