Although unemployment in Canada is hovering at a four-decade low, employees can expect slightly larger salary increases for 2019, according to Aon.
Base pay is projected to rise by 2.8 per cent in 2019, slightly higher than the 2018 actual average total salary increase of 2.7 per cent (including salary freezes and pay cuts), found Aon’s 2018/19 Canadian Salary Planning report, based on a survey of 365 companies.
Only 0.3 per cent of the organizations expect to implement a salary freeze next year, compared with two per cent in 2018.
“Even though employment in many countries is robust by historical standards, the corresponding surge in salary increases has yet to kick into high gear,” said Yanina Koliren, partner and global compensation surveys and solutions leader at Aon.
“Employers are clearly focusing on fostering higher productivity and navigating an uncertain business landscape, and continuing modest inflation undoubtedly is putting a cap on overall employee salary expectations.”
But it’s not all bad news for Canadian employees, according to Suzanne Thomson, senior consultant for talent, rewards and performance at Aon.
“The salary upside might be limited, but so is the downside, since fewer organizations expect freezes next year. Performance remains the key driver of pay decisions among Canadian companies, suggesting that top employees will continue to be compensated above and beyond general salary increase rates.”
• The average rate of employee turnover decreased in 2018 to 10.2 per cent, from 12.6 per cent in 2017.
• Organizations awarded an average of 27.6 per cent of their variable pay awards budget to top executives and senior management in 2018, and expect to award 31.3 per cent in 2019.
• Sectors in which employees can expect higher-than-average increases in 2019 include media and non-bank financial services (3.3 per cent), medical devices (3.2 per cent), mining and construction/engineering (3.1 per cent).
• Lower-than-average increases are expected in the banking, telecom and transport/logistics sectors (all at 2.4 per cent).
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