Employees in line for flat pay raises in 2019: Survey

Star performers expected to see significantly larger raises
|hrreporter.com|Last Updated: 10/12/2018
compensation
Canadian employees hoping for larger pay raises next year will have to wait a little longer as employers expect to maintain the status quo on pay raises at 2.8 per cent in 2019, according to a survey by Willis Towers Watson. Shutterstock

Canadian employees hoping for larger pay raises next year will have to wait a little longer as employers expect to maintain the status quo on pay raises at 2.8 per cent in 2019, according to a survey by Willis Towers Watson.

Employers expect to give professional and client management employees average pay increases of 2.8 per cent in 2019, same as last year. Production and manual labour employees can also expect flat increases next year — 2.7 per cent in both years.

Executives may receive a slightly lower increase next year (2.8 per cent versus 2.9 per cent), while steady increases are planned for management employees (2.8 per cent) and business and technical support employees (2.8 per cent), found the survey of 266 employers.

“Most companies are not under pressure to significantly increase their salary budgets in the near term,” said Sandra McLellan, North America rewards business leader at Willis Towers Watson. “Companies are relying more on variable pay such as annual incentives and discretionary bonuses to recognize and reward their best performers. At the same time, they are rewarding star performers with substantially larger increases while granting minimal increases, if any, to their weakest performers.”

Companies continue to reward star performers with significantly larger pay raises than average performing employees. Professional employees receiving the highest possible rating were granted an average increase of 4.7 per cent this year, nearly double the 2.4 per cent increase granted to those receiving an average rating.

And companies are projecting discretionary bonuses — generally paid for special projects or one-time achievements — will average 5.3 per cent of salary for professional and client management employees, somewhat higher than companies budgeted for this year, found Willis Towers Watson.

“A growing number of companies are coming to grips with the fact that employees are more willing to change companies to advance their careers and to talk openly about their pay. As a result, organizations are facing increased pressure entering next year to devise a focused strategy and plan on how to allocate their precious compensation dollars or risk losing some of their best talent,” said McLellan.



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