Amid economic uncertainty, Canadian employers are lowering their projections for salary increases in 2015, according to a new report.
On Feb. 17, the Conference Board of Canada released its Mid-Year Pulse Check —part of its annual compensation planning outlook survey. In it, the independent research organization said falling oil prices, coupled with regional economic uncertainty will see employers tightening their purse strings when it comes to salary.
The average base salary increases for non-unionized workers is now expected to be 2.7 per cent, down from the original 2.9 per cent projected in the summer of 2014.
According to Ian Cullwick, vice-president of leadership and human resources research, many employers will be playing the wait-and-see game.
“Many organizations are waiting to see how the economy fares before finalizing plans,” he explained. “It is likely that we will see further reductions in salary increases — including pay freezes — from organizations in Alberta and Saskatchewan.”
In December of last year, employers in Saskatchewan and Alberta were still projecting average salary increases of 3.4 per cent and 3.3 per cent respectively, though both will likely see further downward revisions as the year progresses.
And while salary growth predictions have been revised slightly downward for most other provinces, Ontario is the only region whose projection is still in line with its summer forecast.
Retail and wholesale trade sectors are expecting the lowest increases, at 2.3 per cent, followed by education, health and communications at 2.4 per cent. The report also noted there will be continued reductions to projected pay increases in the energy sector.
“The next few months will be challenging for employers as they balance the need to retain top talent with affordability,” Cullwick said.
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