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Canadian employers are anticipating the highest salary increase in two decades as they try to balance inflationary pressures, surging interest rates, recession risks and a tight labour market, a new survey has found.
According to the report by consulting firm Eckler Ltd., the national average base salary increase for next year is projected at 4.2 per cent, excluding planned salary freezes, which parallels 2022 actual base salary increases. Projected salary increases for 2022 was lower than the actual figures.
British Columbia, Ontario and Quebec are projecting the highest average salary increases, with the Yukon, Nunavut and Prince Edward Island projecting the lowest.
The largest average salary increases are expected to be in the technology sector at 5.4 per cent.
The smallest increases are expected in the education, health care, agriculture and hospitality sectors.
Eckler's national compensation practice leader Anand Parsan said salary planning for 2023 has been rife with complexity.
The survey results also show that Canadian organizations are planning to use compensation as a key part of their talent management strategy, with just one per cent of organizations reporting a planned salary freeze for 2023.
Additionally, 44 per cent of organizations remain undecided about salary budgets for 2023.
Meanwhile, new research from talent solutions and business consulting firm Robert Half found that salary remains top of mind for Canadian workers, with 57 per cent of professionals saying they feel underpaid.
The research found thirty-four per cent of workers plan to ask for a raise by the end of the year if they don't get one or the amount is lower than expected, while 37 per cent would consider changing jobs for a 10 per cent increase in pay.
Forty-seven per cent of professionals are more likely to request a higher starting salary today compared to 12 months ago.
The research also showed that employers are stepping up when it comes to compensation in order to win over talent, with 42 per cent offering higher starting salaries.
In addition, 79 per cent of managers who increased base compensation for new hires in the past year have also made pay adjustments for current staff.
This report by The Canadian Press was first published Sept. 27, 2022.
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