Employers expect salaries to rise in 2015

Employers in Canada are expecting salaries to rise by an average of 2.8% in 2015, according to a Morneau Shepell survey.

This is up slightly from the average 2.6% salary increase expected for 2014. The average includes expected salary freezes and excludes promotional or special salary adjustments.

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“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%. This is down from last year’s expected salary increases of 3.9%. Professional, scientific and technical services will also be higher than the national norms, at 3.0% 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% are expected.

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Companies identified a number of 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% 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.

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Staff

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