Canadian HR Reporter

Canadian HR RepoRteR September 22, 2014 6 News employees with base salary in- creases in 2015, while 13 per cent of respondents to the Hay Group survey have not decided — and just four per cent are planning a freeze. "at 13 per cent is up from 10 per cent last year, so those com- mitting to an increase are down by two points and those committing to a freeze are down by one point but, as an offset, those who are un- decided, at 13 per cent, are up by three points," said Aboud. One-quarter of employers had board approval for a salary in- crease of 2.4 per cent, meaning there's a slight difference between approvals and forecasts, he said— but the difference is small. "People seem to be coming in where they forecast, the board commitments are very close to the assumed forecast, so I think the 2.6 holds well for itself." Mercer predicts three per cent Mercer, however, is predicting an average raise in pay of three per cent in 2015 — the same as the actual increase in 2014, accord- ing to its survey of 696 Canadian employers. e energy sector continues to lead the country with the largest actual and projected increases year over year, and when this sec- tor is removed from the national sample, the average projected salary increase drops to 2.9 per cent, said Allison Griffiths, Mer- cer's Canadian workforce rewards practice leader. "is year's results are not sur- prising. Over the last five years, we've observed a differential be- tween the national projection and energy sector of approximately one per cent," she said. Canada has a teeter-totter situ- ation, with the west up, Ontario in the middle and the east down, ac- cording to Glen Hodgson, senior vice-president and chief econo- mist at the Conference Board of Canada, speaking at a Mercer event. "It's a very uneven story across the country." Unlike the United States, where the economic situation is improv- ing — it has seen sustained job growth every month for the last three years — Canada is stuck in a rut, he said. "We're not shrinking but we're not growing very rapidly," he said, adding hopefully the situa- tion will improve next year as the U.S. strengthens. "We know that labour markets are tightening, we haven't seen a lot of job creation in the last year, unemployment is stuck around seven per cent nationally." Private investment is really the weak spot, with many firms still sitting on cash, said Hodgson. "For the moment, it's holding back our recovery." However, real wages are rising, so employers should expect to be paying workers beyond the infla- tion rate, he said. 2.8 per cent from Morneau Shepell Respondents to Morneau She- pell's annual survey are predict- ing a raise of 2.8 per cent in 2015, which is up from the 2.6 per cent expected for 2014 and includes expected salary freezes while ex- cluding promotional or special salary adjustments. Employers are relatively opti- mistic, according to Michel Dubé, a principal in Morneau Shepell's compensation consulting practice in Montreal. "ose expecting a significant increase in revenue, operating bud- gets and staffing outnumber those expecting decreases by four to one. Despite this optimism, employers are still cautious about the salary increases, which likely reflects re- duced competitive pressures in an environment of relatively high unemployment and low inflation." e actual increase for 2014 was 2.7 per cent so 2.8 per cent is a little optimistic but it's also typical of what's been seen in the last few years, he said, adding 12 per cent of respondents expect to increase their workforce by more than 10 per cent. But the differences among job categories are much less signifi- cant because of the low inflation, he said. And when it comes to variable pay, the targets are a little bit higher than the actual, other than for executives, said Dubé. "ese targets don't move on a year-to-year basis very signifi- cantly but we did observe this year that the actual grants were a little bit lower than the targets... for all job categories other than executives." Resource-based provinces leading the way In breaking down the numbers, the mining and oil and gas sector expect average increases of 3.4 per cent, down from last year's ex- pected gains of 3.9 per cent, found the Morneau Shepell survey. Professional, scientific and tech- nical services will also be higher than the national norms, at three per cent on average, reflecting growing competition for talent. Lower than average increases (2.4 per cent) are expected in industries that face more chal- lenging economic circumstances, such as wholesale and retail trade, said Morneau Shepell. Hay Group also found the high- est increases continue to be in the oil and gas sector, at 3.8 per cent, where demand for key skills con- tinues to outweigh strategic sup- ply challenges. Chemicals (3.3 per cent), credit unions (3.2 per cent) and finan- cial services (three per cent) have forecasts higher than the national average of 2.6 per cent, reflecting a demand for key skills and experi- ence, said Hay Group. While Mercer also found the energy sector continues to have the highest salary increases in both 2014 (3.9 per cent) and pro- jected for 2015 (3.7 per cent), the transportation equipment, con- sumer goods and retail/whole- sale industries are projected to see the smallest salary increases at 2.6 per cent, 2.7 per cent and 2.7 per cent respectively. Provincially, Alberta has the highest projected average salary increases in the country (3.2 per cent), followed by Saskatchewan at 3.1 per cent, found Mercer. Comparatively, the lowest pro- jected salary increases are in Que- bec and Atlantic Canada, each at 2.8 per cent. Hay Group also found Alber- ta (3.1 per cent) and Saskatch- ewan (2.9 per cent) are expected to lead the country with project- ed overall base salary increases higher than the national average, while all other provinces are pre- dicting increases of 2.1 to 2.6 per cent. Workers in Calgary (3.2 per cent), St. John's (3.1 per cent) and Saskatoon (three per cent) will see the highest salary increases (see sidebar). Finally, Canadian organiza- tions are rewarding high-per- forming employees with greater than average salary increases, said Mercer. The highest per- formers received an average five per cent base salary increase in 2014, compared to 2.9 per cent for middle performers and 0.3 per cent for the lowest performers. is is expected to continue in 2015 — Canadian employers are projecting a 5.2 per cent salary in- crease for the highest-performing employees, found Mercer. sALARy suRVey < pg. 1 High-performing employees could see 5 per cent CRUNCHING NUMBERS Salary projections through the years Province 2015 projection 2014 projection 2013 projection 2012 projection 2011 projection B.C. 2.6% 2.3% 2.7% 2.5% 2.4% Alberta 3.1% 3.2% 3.6% 3.4% 2.9% Saskatchewan 2.9% 3.4% 3.2% 3.2% 3.3% Manitoba 2.3% 2.6% 2.7% 2.5% 2.7% Ontario 2.5% 2.5% 2.7% 2.7% 2.4% Quebec 2.6% 2.6% 2.7% 2.8% 2.7% Maritimes 2.1% 2.1% 2.6% 2.4% 2.7% Newfoundland 2.6% 4.0% 3.4% 3.4% 3.5% Source: Hay Group

• Cover