What are Canadian employers planning?
Salaries for 2024 are once again looking to rise, according to new research from Normandin Beaudry. However, the increase is not expected to be as high as it was last year.
In its latest annual wage outlook report, Normandin Beaudry predicts that pay increases will increase despite negative expectations in the overall economy.
Being proactive in managing salaries will be important this year, given the uncertain economic climate and rising inflation rate, and a continuing difficult labour market. Many organizations across Canada are therefore planning carefully. Average salary increase forecasts in Canada softened compared to last year, but remain higher than normal with an average forecasted increase of 3.6% for 2024 excluding salary freezes.
The study — which heard from more than 700 organizations across Canada — found that professional, scientific and technical services sectors are forecasting increases in 2024 at 4.2%, the highest sectors in the study. All organizations of all ownership types however under pressure. Minor variances across all company ownership types were observed for 2024 increase forecasts:
Private sector (not listed on the stock market): 3.6%
Not-for-profit organizations: 3.6%
Private sector (listed on the stock market): 3.5%
Public and parapublic sectors: 3.3%
Please see the Normandin Beaudry study for additional details and more tables including those for planned additional budgets and total budgets.
WHAT ACTIONS SHOULD EMPLOYERS TAKE?
Employers should review the competitiveness of their salaries each year in relation to their local and regional marketplace, their sector, and what is happening in the general economy.
In North America, the labour market is still in favour of employees; however employers are slowly regaining the upper hand when it comes to salary negotiations, according to another survey from the Canadian HRReporter.
What turnover is your business experiencing? Are employees asking or suggesting that rates of pay should be reviewed? Are potential new hires not accepting or are negotiating offers?
These are all signs that your market competitiveness may not be aligned, or that employees are expecting the organization to adjust their paycheck.
In the end it will come down to what the business can afford, both financially and in keeping and attracting talent. Having insight and data however will go a long way to support decision-making that is right for both the organization and it's employees.
Our team at TAP Strategy & HR Consulting are experts in this area and can help you navigate these decisions. Give us a call at 613-222-2499.
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Bruce Weippert is the co-founder and president of TAP Strategy & HR Consulting, a boutique-style management consulting firm specializing in strategy, HR services and Helping Businesses Succeed.
