COMP NEWS – A series of new surveys on Canadian compensation planning indicate that 2024 will be the year of sufficient – but not impressive – pay raises for employees.
Three new surveys came out recently, painting another cautious picture for 2024 when it comes to Canadian employers and compensation planning.
Overall, the results are not too surprising, though some forecasts have fallen slightly from predictions made in the summer of 2023.
“There’s no question that the last three or four years have been brutally hard on everybody,” says Jason Foster, associate professor of human resources and labour relations at Athabasca University.
“I think everybody — employers and workers alike — are just hoping we’re hitting a period… of relative stability, to have the waters be calm. And I think one of the ways employers can do that is that assurance of ‘OK, yeah, we got you, we understand your grocery bills are up, so here’s a little bit of a pay bump.’”
Data indicates that more than two-thirds of anticipated pay raises will be made in order to address rising cost of living increases, while less than one-fifth will be to address promotions or incentives.
Over half (55%) of the Canadian workforce is anticipating a pay raise in 2024; on the flip side, 62% of Canadian employers are planning to offer pay increases in 2024.
And the leading reason for pay rises (according to managers) has been to support employees with cost of living (67%), followed by: to aid morale and retention (17%); or for a promotion, time served, or targets being met (17%), according to a Robert Walters survey.
On average, Canadian employers are forecasting 3.1% merit increase budgets and 3.6% total increase budgets — lower than what was reported in August: 3.3% merit and 3.7%, according to Mercer’s recent survey of almost 600 participants.
All three of these Canadian surveys are basically showing the same trends, says Sara Mahabadi, assistant professor at the University of Alberta.
“In general, for the last two years, we have had an all-time-high inflation rate. And [workers] were struggling with the steep prices for food, housing, health care, and so on, so forth. And so this high cost of living really had negative impacts on employees wellbeing — both physical wellbeing and mental wellbeing — and I think employers, generally, can see that, can feel that. And so they understand that they need to somehow help employees with their needs.”
But at the same time, there are some differences in different sectors, she says.
“For instance, in the high tech industry, we have been seeing increasing salaries previously… now they are not increasing as much as they used to, because they think that they are already competitive,” says Mahabadi, while energy, mining and data processing are seeing boosts.
To read more about the surveys, click here.
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