An increasing number of organizations are struggling to recruit and retain employees
OTTAWA, Oct. 30, 2014 /CNW/ - Canadian organizations are planning moderate base salary increases for 2015 in response to Canada's sluggish economic growth. The average pay increase for non-unionized employees is projected to be 2.9 per cent next year, one percentage point higher than the forecasted inflation rate for 2015, according to The Conference Board of Canada's Compensation Planning Outlook 2015.
"The good news is that most Canadian organizations are planning salary increases for 2015. However, employers remain cautious about Canada's economic performance and are opting for the same modest wage increases seen in the past few years," said Ian Cullwick, Vice-President, Leadership and Human Resources Research.
- Saskatchewan is now the hottest provincial labour market in Canada.
- Average pay increase for non-unionized employees is projected to be 2.9 per cent in 2015.
- The highest average increase is in the oil and gas sector at 3.9 per cent, while the health sector will see the lowest average increases at 2.2 per cent.
- Sixteen per cent of organizations expect growth in the size of their workforce next year.
Salary increases vary considerably depending on region and industry. Once again, Saskatchewan and Alberta employers will lead the nation with projected average increases of 3.6 per cent and 3.5 per cent respectively. The lowest average increases are expected in the Atlantic provinces at 2.3 per cent, followed by Ontario at 2.5 per cent. By industry, the highest average increase is expected to be in the oil and gas sector at 3.9 per cent, while at 2.2 per cent, the health sector will have the lowest average increases.
"Although more organizations are starting to report challenges recruiting and retaining employees, we're still not back up to pre-recession levels, when close to three quarters of organizations experienced difficulty in this area," said Mr. Cullwick.
Sixty-four per cent of organizations say they are experiencing difficulty recruiting and retaining employees this year, up from 58 per cent in the previous year. This number is much higher in Saskatchewan and Alberta, where 85 per cent and 78 per cent of organizations, respectively, struggle to attract and retain talent. Labour market pressure is highest in health sector where 82 per cent of organizations are facing challenges recruiting and retaining staff. This is significantly higher than last year when only 46 per cent of health organizations reported difficulties.
Short-term incentive pay practices are widely used across most industry sectors to drive individual performance. In 2014, payouts were 11 per cent of total base pay spending versus a planned target of 10.8 per cent. Similar to what was planned for last year, organizations expect to spend 10.7 per cent of total base pay on short-term incentive pay.
This is the 33rd edition of the Compensation Planning Outlook, which summarizes the results of the Conference Board's annual compensation survey and forecast conducted in June 2014. The findings are based on the responses of 382 organizations across Canada.
The findings of this report will be presented at the Where are pay plans headed in 2015? Compensation Planning webinar on Tuesday, December 9, at 2:00 PM EST.
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Image with caption: "Salary increases for 2015 by province (CNW Group/Conference Board of Canada)". Image available at: http://photos.newswire.ca/images/download/20141030_C5403_PHOTO_EN_7296.jpg
SOURCE: Conference Board of Canada
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