Employers conservative but optimistic for 2008

Alberta to lead the pack in salary increases and finance sector heating up: Watson Wyatt

Yet another salary survey is predicting Alberta’s impressive sway over the rest of the country will continue into 2008.

Watson Wyatt Worldwide is forecasting increases of 3.80 per cent for 2008 in Calgary while other parts of the province and neighbouring Saskatchewan could see base salary enhancements of 3.68 per cent and 3.58 per cent respectively.

Other surveys have predicted higher numbers but Cherie Langevin, director of survey operations at Watson Wyatt in Toronto, says the numbers reflect the participants in the 2007/2008 Annual Canadian Salary Survey.

“Our survey does not include the really large oil and gas companies… so generally our figures are more reflective of what’s happening for everyone else in Alberta. They don’t all have those large-dollar budgets to spend so they’re having to compete with them but can’t afford 10-per-cent increases. It’s not skewed.”

Alberta’s strength should continue for a while and it’s still definitely an employee’s job market, says Langevin, who moved from Alberta to Toronto six months ago.

“Even if oil prices drop a little bit, that ripple effect is going to remain for quite some time. Everybody is hiring and we used to joke you should advertise even if you’re not hiring.”

For Canada overall, the survey anticipates a 3.5-per-cent increase, though projections can be conservative in a healthy economy.

“The last couple of years have had the same pattern, where the projections are a bit on the conservative side but the actual comes in higher,” says Langevin.

Conversely, in a down market, employers tend to overestimate and don’t realize what’s happening until it hits, says Liz Wright, Toronto practice leader, compensation, at Watson Wyatt.

In 2007, base salary increases across Canada averaged 3.61 per cent, with Calgary reporting the highest gain at 3.95 per cent and Quebec (excluding Greater Montreal) the lowest at 3.06 per cent.

Within the industry sectors, the largest overall salary increase occurred in the banking/finance sector, where employees averaged a 4.18-per-cent increase, followed by professional/business services at 4.09 per cent.

These two industry sectors had predicted the highest increases in the previous year’s survey and both exceeded predictions. Heading into 2008, they are again projecting solid increases at 3.99 per cent and 3.67 per cent respectively.

A couple of years ago, the banking/finance sector was holding the line a bit, staying in the 2.5-per-cent range while everyone else was closer to 3.5 per cent, says Langevin.

“But now they’re really starting to heat up. Finance positions have been a hot market for a couple of years now,” she says.

As for the public sector, it’s projecting an overall base salary increase of 3.59 per cent in 2008, compared to actual increases in 2007 of 3.84 per cent.

The survey reflects responses from 360 organizations reporting data on more than 110,000 incumbents and was conducted in May-July 2007.

Sarah Dobson is editor of Canadian Compensation & Benefits Reporter, a sister publication to Canadian HR Reporter that focuses on total rewards. For more information visit www.hrreporter.com/ccbr.

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