With another year of robust salary growth, Canadian pay increases continued to close the gap on raises being offered south of the border.
The final Canadian numbers are very interesting, said Kay Schmitke, project manager of the total rewards department of WorldatWork, which released its comprehensive survey of compensation plans across North America last month.
After years of lagging behind the U.S., “really positive growth” means Canada has almost caught up to the U.S. where increases in base pay still average about 4.5 per cent nationally.
In fact, this year’s increases in Canada were so strong they comfortably surpassed expectations. Projected increases for hourly non-union workers for example were 3.2 per cent but that group actually averaged base pay increases in the range of 3.5 per cent. Next year’s increases are predicted to be about 3.7 per cent.
Projections for non-management salaried were 3.7 per cent but raises of 4.1 per cent were more typical. Officers and executives meanwhile were expected to get pay hikes of about 3.8 per cent but ended up being 4.4 per cent.
Increases above four per cent in most categories haven’t been seen since the early ’90s, and in most cases the increases are larger than those offered last year.
While there is no empirical evidence to support the theory, anecdotally it looks like the United States was hit harder by the economic slowdown and that is reflected in larger increases in Canada than in the U.S., suggests Schmitke.
All responses were completed by May and more than 250 Canadian companies participated this year.
The findings also illustrate the continuing evolution of compensation in this country, where greater importance is being put on variable pay, said Schmitke.
However, variable pay increases and growth in numbers of companies offering variable pay were slight compared to base pay increases. This year, 72.2 per cent of all respondents said they offer some form of variable pay, up from 71.7 per cent last year, but of those without a program in place, 30.9 per cent said they are considering introducing one.
Schmitke said this is really good news because variable pay represents a win-win situation for employers and employees. She also said the increase in the percentage of payroll going to variable pay proves the practice is growing and companies are enjoying success in implementing them. Last year, 9.9 per cent of payroll for management workers went into variable programs but that number is up considerably to 12.5 per cent this year.
Some of the other findings in the WorkatWork survey:
•Less than 17 per cent of Canadian respondents to the study budget promotional increases as a separate item and on average promoted employees receive a 7.4 per cent increase for promotion.
•There was almost no increase in the use of stock-based compensation in 2001, with 55.9 per cent of respondents saying they used stocks to compensate employees, whereas last year the number was 55.4 per cent.
•Of those companies that offer stocks as compensation, more than 61 per cent said they will be offering options further down the organization, 53.8 per cent said they would likely increase the size of the grant this year and 7.7 per cent said options would be given as spot awards.
•Attraction and retention continues to be a problem for a large majority of companies with 71.8 per cent reporting difficulty finding and holding on to key people. In the United States, 70.8 per cent reported the same problem. More than 90 per cent of Canadian respondents said they have taken action to address the problem with base salary increase the most popular strategy.
The final Canadian numbers are very interesting, said Kay Schmitke, project manager of the total rewards department of WorldatWork, which released its comprehensive survey of compensation plans across North America last month.
After years of lagging behind the U.S., “really positive growth” means Canada has almost caught up to the U.S. where increases in base pay still average about 4.5 per cent nationally.
In fact, this year’s increases in Canada were so strong they comfortably surpassed expectations. Projected increases for hourly non-union workers for example were 3.2 per cent but that group actually averaged base pay increases in the range of 3.5 per cent. Next year’s increases are predicted to be about 3.7 per cent.
Projections for non-management salaried were 3.7 per cent but raises of 4.1 per cent were more typical. Officers and executives meanwhile were expected to get pay hikes of about 3.8 per cent but ended up being 4.4 per cent.
Increases above four per cent in most categories haven’t been seen since the early ’90s, and in most cases the increases are larger than those offered last year.
While there is no empirical evidence to support the theory, anecdotally it looks like the United States was hit harder by the economic slowdown and that is reflected in larger increases in Canada than in the U.S., suggests Schmitke.
All responses were completed by May and more than 250 Canadian companies participated this year.
The findings also illustrate the continuing evolution of compensation in this country, where greater importance is being put on variable pay, said Schmitke.
However, variable pay increases and growth in numbers of companies offering variable pay were slight compared to base pay increases. This year, 72.2 per cent of all respondents said they offer some form of variable pay, up from 71.7 per cent last year, but of those without a program in place, 30.9 per cent said they are considering introducing one.
Schmitke said this is really good news because variable pay represents a win-win situation for employers and employees. She also said the increase in the percentage of payroll going to variable pay proves the practice is growing and companies are enjoying success in implementing them. Last year, 9.9 per cent of payroll for management workers went into variable programs but that number is up considerably to 12.5 per cent this year.
Some of the other findings in the WorkatWork survey:
•Less than 17 per cent of Canadian respondents to the study budget promotional increases as a separate item and on average promoted employees receive a 7.4 per cent increase for promotion.
•There was almost no increase in the use of stock-based compensation in 2001, with 55.9 per cent of respondents saying they used stocks to compensate employees, whereas last year the number was 55.4 per cent.
•Of those companies that offer stocks as compensation, more than 61 per cent said they will be offering options further down the organization, 53.8 per cent said they would likely increase the size of the grant this year and 7.7 per cent said options would be given as spot awards.
•Attraction and retention continues to be a problem for a large majority of companies with 71.8 per cent reporting difficulty finding and holding on to key people. In the United States, 70.8 per cent reported the same problem. More than 90 per cent of Canadian respondents said they have taken action to address the problem with base salary increase the most popular strategy.
