Canadian workers can expect a third year of modest salary increases in 2014

CALGARY, Oct. 22, 2013 /CNW/ - Amid soft economic growth, Canadian organizations are planning moderate base salary increases for the third year in a row. The average pay increase for non-unionized employees is projected to be 2.9 per cent next year, almost exactly in line with actual gains in 2013, according to The Conference Board of Canada.

Released today at a news conference in Calgary, the Compensation Planning Outlook 2014 summarizes the findings of the Conference Board's 32nd annual compensation survey.

"While Canada's economy is in relatively good shape, growth has been sluggish. For the most part, organizations will be looking to control costs and carefully allocate their compensation dollars," said Ian Cullwick, Vice-President, Leadership and Human Resources Research.

"The divide between East and West persists. Frenzied resource development and near bottom unemployment rates means that Alberta and Saskatchewan are again expecting to offer the highest pay increases next year."

Salary increases vary considerably depending on region and industry. Regionally, Alberta and Saskatchewan employers will lead the nation with projected average increases of 3.7 per cent. The lowest  average increases are expected in the Atlantic provinces at 2.5 per cent, followed by Ontario at 2.6 per cent.

Nationally, 58 per cent of organizations reported challenges recruiting and/or retaining employees, a decline from 69 per cent in 2012.

Organizations in Alberta and Saskatchewan face a different set of challenges than those of the rest of the country — a full three-quarters of organizations said they struggled to attract and retain talent. In the oil and gas sector, 81 per cent of respondents reported recruitment and retention challenges.

The expected increase in the private sector is three per cent, while the average increase for employees in the public sector is expected to be 2.7 per cent.

Short-term incentive pay practices are widely used across most industry sectors. Actual short-term incentive payouts exceeded targets last year. In 2013, payouts were 11.6 per cent of total base pay spending versus a planned target of 11 per cent. Short-term incentive targets for 2014 are similar to 2013 targets. The highest short-term incentive pay targets will be in the oil and gas sector at 16.6 per cent.

The findings are based on the responses of 411 organizations across Canada. The survey was conducted between June and August 2013.

The report findings will presented at a Conference Board webinar, Where are pay plans headed in 2014? Compensation Planning Webinar, on November 18, 2013, at 02:00 p.m. EST.

SOURCE: Conference Board of Canada