Canadian Organizations Stay the Course with Respect to Salary Increases for 2012, According to Aon Hewitt Research

Employers Need to Think Beyond Base Pay to Attract and Retain High Performers

TORONTO, Sept. 9, 2011 /CNW/ - Data from the 33rd annual Canada Salary Increase Survey projects average salary increases of 3.1 per cent in 2012, according to Aon Hewitt, the global human resources consulting and outsourcing solutions business of Aon Corporation (NYSE: AON). In June and July, 542 employers, representing over 800,000 salaried employees, responded to the survey.

The projected 2012 increase is a slight improvement over actual 2011 salary increases, which averaged 2.9 per cent. "The Consumer Price Index (CPI) is expected to average 2.9 per cent this year, so many employees' raises are just keeping up with inflation," said Suzanne Thomson, a senior associate with Aon Hewitt in Toronto. "Next year, Statistics Canada is projecting a 2.0 per cent increase in the CPI, so employees should feel less of a pinch if salaries increase by 3.1 per cent."

Another positive trend is limited pay freezes. This year, 2.7 per cent of employers froze salaries; less than half a per cent expect to do so next year. In 2010, that number was 8.5 per cent, while it was 29.2 per cent in 2009. "There is more good news with respect to pay cuts," said Thomson. "Of the very few organizations that reported cutting salaries in 2011, two-thirds are planning to fully or partially restore that cut."

Saskatchewan Leads the Way
The following chart shows the average salary increases actually awarded in various parts of the country, and those projected for 2012:

Province or Region Actual Average 2011 Increase Projected Average 2012 Increase
Saskatchewan 3.8% 4.4%
  • Regina
3.9% 3.6%
Alberta 3.4% 3.6%
  • Calgary
3.4% 3.7%
  • Edmonton
3.3% 3.4%
British Columbia 2.9% 2.7%
  • Vancouver
3.0% 3.3%
Atlantic Canada overall 2.9% 2.6%
Nova Scotia alone 2.7% 2.7%
Quebec 2.8% 2.9%
  • Montreal
2.7% 2.9%
Ontario 2.7% 3.0%
  • Greater Toronto Area overall
2.8% 3.0%
  • Toronto alone
2.7% 3.0%
Manitoba 2.6% 2.7%
  • Winnipeg
2.7% 3.0%

Going Beyond Pay
"The news regarding salary increases, while positive, does present some challenges for employers," stated Susan Hunter, national leader of Aon Hewitt's Rewards group. "Employee attraction and retention will become more pressing issues as the supply of workers decreases with baby boomer retirements. If base salary increases are modest, employers have to find ways to hang on to their high performers."

Hunter suggests organizations consider the following approaches in order to engage key employees:

  • Hold some part of the compensation budget in reserve to provide greater base pay increases for employees who surpass established performance objectives.
  • Revisit variable compensation programs to ensure they continue to help achieve business objectives. "Variable compensation programs enable high performers to earn additional compensation, generally on the basis of corporate or individual performance," said Hunter. "They're not new and are offered by over 80 per cent of organizations. However, their design may need revamping as goals change. Communication is also key: employees must understand any design modifications so that they know exactly what to do in order to earn additional compensation."
  • Ensure that employees understand all that they're receiving for their efforts - the employee side of the employment value proposition. "Employers should have a larger conversation with each employee that goes beyond pay and covers other aspects like training and development, career opportunities, workplace flexibility, and so on," said Hunter. "To provide a broad perspective of compensation and benefits, however, annual total rewards statements are an effective way to provide the big picture, beyond base salary."
  • Give high performers opportunities to do new and interesting tasks. According to Hunter, "If additional financial compensation is not possible, it's especially important to make sure high performers are continually challenged and recognized for their achievements. That will help to keep these key employees on board."

To receive a copy of Aon Hewitt's 2011-2012 Canada Salary Increase Survey summary report, please contact

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About Aon Hewitt
Aon Hewitt is the global leader in human resource consulting and outsourcing solutions.  The company partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance.  Aon Hewitt designs, implements, communicates and administers a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies.  With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees.  For more information on Aon Hewitt, please visit

About Aon
Aon Corporation (NYSE: AON) is the leading global provider of risk management services, insurance and reinsurance brokerage, and human resources solutions and outsourcing. Through its more than 59,000 colleagues worldwide, Aon unites to deliver distinctive client value via innovative and effective risk management and workforce productivity solutions. Aon's industry-leading global resources and technical expertise are delivered locally in over 120 countries. Named the world's best broker by Euromoney magazine's 2008, 2009 and 2010 Insurance Survey, Aon also ranked highest on Business Insurance's listing of the world's insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues in 2008 and 2009. A.M. Best deemed Aon the number one insurance broker based on revenues in 2007, 2008 and 2009, and Aon was voted best insurance intermediary 2007-2010, best reinsurance intermediary 2006-2010, best captives manager 2009-2010, and best employee benefits consulting firm 2007-2009 by the readers of Business Insurance. Visit for more information on Aon and to learn about Aon's global partnership and shirt sponsorship with Manchester United.



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