Companies Forging Ahead With Salary Increases

February 17 2012
Posted by: hkennedy

February 16, 2012

Karla Thorpe, Director, Leadership and Human Resources Research, The Conference Board of Canada

The economic doom and gloom dominating the headlines is not yet affecting raises anticipated for Canadian workers.

According to The Conference Board of Canada’s latest compensation survey, employers are not letting the economic uncertainly change their plans for employees’ salaries in 2012.

Organizations surveyed in December 2011 for the Compensation Planning Outlook 2012: Mid-Year Pulse Check said they are planning to give a 3.0 per cent salary increase, on average, to their non-unionized workers. This is down slightly from the 3.1 per cent average salary increase projected in the summer of 2011. Salary increases have been stable since 2011, but are up substantially from the recession years when increases averaged 2.4 per and 2.7 per cent in 2009 and 2010, respectively.

Somewhat surprisingly, public sector organizations—particularly Crown corporations and those in Western Canada—are making the biggest upward adjustments. Public sector organizations are planning more generous increases than previously forecast with non-unionized increases of 2.9 per cent projected, compared to 2.6 per cent in the Conference Board’s summer 2011 survey. This adjustment comes at a time when provincial and federal governments are putting into place austerity measures to help reduce their deficits. But public sector organizations in Western Canada are not feeling the same squeeze as in other parts of the country. The economy in the West continues to boom due to high commodity prices. So even though other governments are pulling back on spending, Alberta Premier Alison Redford’s most recent budget contained a number of spending increases buoyed by the province’s thriving resource revenue.

Private sector companies, meanwhile, are holding their compensation increases relatively steady at 3.1 per cent based on the survey results.

Wage increases for unionized workers are expected to be a little higher in 2012 than previously projected in both the private and public sectors. Unionized employees in the private sector can expect wage increases averaging 2.4 per cent, while those in the public sector will see their wages rise by an average of 1.7 per cent. The projected increases in wage gains may have some tempering effect on conflict in labour negotiations this year. Nevertheless, the overall bargaining climate remains tense, as issues such as changes to defined benefit pension plans, contracting out, and job security continue to provide flashpoints for conflict between employers and labour.

The Mid-Year Pulse Check survey was sent out in December 2011 to all 381 organizations that responded to the Conference Board’s Compensation Planning Outlook 2012 survey (conducted over the summer of 2011). A total of 236 organizations replied to the midyear survey, representing a response rate of 62 per cent.

For further information, download the Compensation Planning Outlook 2012: Mid-Year Pulse Check and the Industrial Relations Outlook 2012: Going Sideways, With a Twist.

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