Salaries to rise by average of 2.6 per cent in 2014

Greatest gains in mining, oil and gas extraction: Survey

Canadian employers expect salaries to rise by an average of 2.6 per cent in 2014 (which includes expected salary freezes and excludes promotional or special salary adjustments), according to Morneau Shepell's annual compensation survey. This is similar to the increase expected for 2013 and also in line with increases actually granted in 2013.

Overall, respondents expect 2014 to be pretty flat in terms of revenue growth, profitability and staffing levels, found the survey of more than 300 employers.

Respondents in the mining and oil and gas extraction sector expect the greatest salary increases for 2014 at 3.5 per cent on average, but such expectations fall short of the 4.7 per cent granted in 2013 in the oil and gas extraction sector.

The manufacturing sector is expected to maintain salary increases in line with the overall average, although some traditional sub-sectors such as printing and paper or wood products are budgeting significantly lower salary increases.

Salary budgets are tight and more than 70 per cent of respondents identify the competitiveness of their compensation package as the number one priority on the compensation front, found Morneau Shepell.


Sponsors of defined benefit (DB) pension plans continue to struggle with oversized pension costs. Seventy per cent of large organizations offering DB plans indicated this is their top issue for next year. In the last couple of years, nearly 50 per cent of these organizations have either elected for funding relief measures made available in various Canadian jurisdictions or adopted plan changes aimed at reducing the employer pension cost.

Fifteen per cent of those that have not yet implemented employer cost-reduction measures intend to do so next year, found the survey.

Sponsors of defined contribution (DC) retirement plans appeared to enjoy a much smoother ride, said Morneau Shepell, but there are still rising concerns about the ability of participants to adequately plan for their retirement. Short of increasing the level of contributions to these plans, sponsors are strongly promoting financial education for plan members, including making available sophisticated decision support tools and simplifying the suite of investment options available.

Health care

While cost control and disability management come up as the top priorities for 2014 for sponsors of benefits programs, as many as 15 per cent of respondents have improved their health-care programs over the last couple of years while 10 per cent plan to implement improvements next year.

More than 40 per cent of the responding organizations plan to implement management training initiatives next year to help remove the stigma associated with mental health issues. And in response to the new voluntary National Standard for Psychological Health and Safety in the Workplace, one-third of respondents plan to implement policies in this respect next year while 20 per cent did so during the last two years.

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