Morneau Shepell Survey shows salaries expected to increase by 2.8 per cent in 2015

Annual survey of Compensation and Trends in Human Resources indicates employers are more optimistic about the coming year

TORONTO, Aug. 7, 2014 /CNW/ - Employers in Canada are expecting salaries to rise by an average of 2.8 per cent in 2015, according to Morneau Shepell's annual survey of Compensation and Trends in Human Resources. This is up slightly from the average 2.6 per cent salary increase expected for 2014. The average includes expected salary freezes and excludes promotional or special salary adjustments.

"Employers are relatively optimistic about the coming year," said Michel Dubé, a Principal in Morneau Shepell's Compensation Consulting Practice. "Those expecting a significant increase in revenue, operating budgets and staffing outnumber those expecting decreases by four to one. Despite this optimism, employers are still cautious about the salary increases, which likely reflects reduced competitive pressures in an environment of relatively high unemployment and low inflation."

The survey showed higher than average expected salary increases in a few sectors. The mining and oil and gas sector expect average increases of 3.4 per cent. This is down from last year's expected salary increases of 3.9 per cent.  Professional, scientific and technical services will also be higher than the national norms, at 3.0 per cent on average, reflecting increased competition for talent in this sector.

Lower than average increases are expected in certain industry groups that face more challenging economic circumstances.  This includes wholesale and retail trade where average salary increases of 2.4 per cent are expected.

"Faced with tight salary budgets, organizations will be investing in programs that help to improve engagement and productivity," said Randal Phillips, Executive Vice President and Chief Client Officer at Morneau Shepell. "About half of the survey respondents indicated their priorities for 2015 would include improving the communication of total rewards programs, training and development programs, and workplace health and well-being."

Companies identified a number of specific priorities including improved mental health in the workplace. Workplace mental health is now the leading cause of sick leave and disability and is a growing concern in many companies. The Conference Board of Canada estimates that mental illness costs employers more than $20 billion per year. The survey finds almost 50 per cent of employers said they had mental health training for managers or were planning to implement training in the next 12 to 18 months.

To help fund training programs, organizations will also be looking for ways to reduce costs and be more efficient. Priorities include finding ways to reduce sick leave and disability costs, and reducing the cost of benefit and retirement plans. 

For employers with defined benefit pension plans, about one third indicated they would be reviewing plan design or employee cost-sharing; about one quarter would be looking at whether they should convert to defined contribution plans. According to Phillips, "This underscores the need for governments to open the door for alternatives, such as target benefits plans, to help preserve many of the benefits of our current pension system for employers and their employees."

Morneau Shepell's 32nd annual Compensation and Trends in Human Resources survey was conducted between mid-June and the end of July 2014, with input from organizations employing 800,000 people in Canada (3.4 million worldwide). The benchmark organizations represent a broad cross-section of industry sectors in Canada.

About Morneau Shepell Inc.
Morneau Shepell is the largest company in Canada offering human resources consulting and outsourcing services. The Company is the leading provider of Employee and Family Assistance Programs, as well as the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions in Canada. Through health and productivity, administrative, and retirement solutions, Morneau Shepell helps clients reduce costs, increase employee productivity and improve their competitive position. Established in 1966, Morneau Shepell serves more than 20,000 clients, ranging from small businesses to some of the largest corporations and associations in North America. With approximately 3,600 employees in offices across North America, Morneau Shepell provides services to organizations across Canada, in the United States, and around the globe. Morneau Shepell is a publicly-traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.

SOURCE Morneau Shepell - Corporate

For further information: Nathan Gibson, Manager, Corporate Communications, Morneau Shepell, ngibson@morneaushepell.com, 416-390-2641