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Salary Increases for Canadian Workers Remain Modest—but not in all Sectors and not for Long

A sluggish economic outlook is causing organizations to plan for another year of moderate base salary increases for 2013.

Toronto, October 24, 2012—A sluggish economic outlook is causing organizations to plan for another year of moderate base salary increases for 2013. The Conference Board of Canada’s Compensation Planning Outlook 2013 projects average increases for non-unionized employees of three per cent next year, largely in line with actual gains in 2012. 

This is a chart of the inflation vs increases between 1993-2013Released today at the Compensation Outlook 2012 conference, this report summarizes the findings of the Conference Board’s 31st annual compensation survey. 

“Employers have not yet felt the full effects of looming workforce shortages. But it is apparent that the labour market is tightening, especially in Western Canada and in the natural resources and professional, scientific, and technical services industries,” said Karla Thorpe, Director, Leadership and Human Resources Research. 

“Assuming no significant hiccups to the global economy, the unemployment rate is expected to dip in 2014, and labour supply shortages will re-emerge over the medium term. 

According to the survey, 69 per cent of organizations report challenges with recruiting and/or retaining personnel. The top professions in demand include engineering, specialist information technology, and skilled trades. 

Labour market pressure is most acute in Saskatchewan and Alberta, where 83 and 82 per cent, respectively, of employers face challenges recruiting and retaining employees. The pressure is greatest in the natural resources sector, where virtually all firms responding to the survey are facing challenges recruiting and retaining employees. 

Given talent shortages in resource industries, it is not surprising that employers in Alberta and Saskatchewan are again expecting to offer the highest base pay raises, (salary increases averaged 3.9 per cent in Alberta and Saskatchewan last year). Alberta employers are projecting average increases of 3.8 per cent, slightly higher than the 3.7 per cent average in Saskatchewan. The lowest average increase is expected in Ontario at 2.7 per cent. 

The oil and gas industry is projecting the highest average increase at 4.2 per cent in 2013, followed by the natural resources sector (excluding oil and gas) at 3.6 per cent.

The expected increase in the private sector in 2013 is 3.1 per cent, slightly above the three per cent increase given last year. The average increase for employees in the public sector is expected to be 2.8 per cent in 2013. The public sector includes federal and provincial government departments, agencies, and Crown corporations; municipalities; hospitals; universities; and colleges.

For unionized employees, the average wage increase projected for 2013 is two per cent, slightly below the actual increase for contracts negotiated in 2012.

The report, Compensation Planning Outlook 2013, is based on the responses of 401 organizations across Canada.

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