Salary increases slower on economic uncertainty: poll

Businesses are more cautious about salary increases amid economic uncertainty and cost reductions, says a new Mercer survey.

Salary increases are projected to rise 2.6% next year across all employee groups, slowing from gains of 2.8% in 2016 and 3.0% in 2015, Mercer says in a report released Wednesday. “When anticipated salary freezes by some organizations are taken into account, overall salary increases in 2017 are expected to be even lower, at 2.3%,” the firm says.

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Alberta, struggling with a recession and an economy hit by this spring’s wildfires, is projecting salary increases below the national average. Forty percent of energy organizations say they intend to freeze salaries in 2017.

“These are some of the lowest overall salary increase projections we’ve seen since our survey began more than 20 years ago,” Gordon Frost, market business leader for Mercer’s Canada talent business, says in a statement.

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Organizations continue to provide higher-than-average salary increases to their highest performing employees, with the top 7% of staff projected to receive an average salary increase of 4.3% in 2017 and the bottom 9% expected to receive increases of between 0.2% and 1.0%.

Mercer’s annual compensation planning survey for 2016-2017 included responses from nearly 500 organizations.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.