The survey released on Sept. 5 says companies are planning to increase their workers’ salaries to retain and reward their best people.
More than 700 companies across Canada took part in the survey this summer. The results show that employers are expected to raise their employees’ salaries by 3.6 percent on average in 2024, excluding salary freezes.
“Taking a proactive approach in managing salaries will be more important than ever, given the uncertain economic climate, evolving inflation rate and difficult labour market conditions,” the survey report said.
According to the report, 43 percent of the surveyed say they plan to secure additional salary budgets, averaging one percent, in order to retain staff who hold critical roles, reward high performers, and accelerate the salary progression of certain employees, among several other priorities.
Only two percent of companies surveyed are forecasting a salary freeze next year. The percentage is considered low when compared to pre-pandemic wage freezes which ranged from three to five percent, the report noted.
Nevertheless, companies are exercising more caution in wage hikes as the average projected increase (excluding salary freeze) for non-unionized employees in 2024 is 3.6 percent—a 0.6 percentage point lower than the projected figure in 2023.
In addition, the average salary increase granted to this group of employees in 2023 (4.1 percent) was lower than the forecasted number (4.2 percent).
The report says “significant challenges remain” for Canadian companies as they continue to face uncertain economic conditions including rising interest rates, and labour shortage—despite an “uptick” in immigration in recent months.
Sectors that will likely see their workers having wage increases above the national average and up to 3.9 percent are those in the scientific and technical services, real estate, pharmaceutical, manufacturing, accommodation, and food services.
In a similar fashion, provinces and territories that are forecasted to have salary increases above or equal to the national average in 2024 are Quebec (3.7 percent), and Ontario, B.C., and Yukon, at 3.6 percent respectively.
“Despite another year of higher-than-normal forecasted salary increases, companies would be wise to exercise caution, as salary increases represent a permanent increase in fixed operating costs,” the report said.
“Organizations hoping to set themselves apart may benefit from adopting more creative approaches in finding the right mix of monetary and non-monetary components as part of their total rewards offering.”