FACED WITH HIGH INFLATION, THE GREAT RESIGNATION AND LABOUR SHORTAGES, COMPANIES ARE CONTINUING TO INCREASE SALARIES IN 2022 TO ATTRACT AND RETAIN TALENT.
Toronto, Ontario – (February 8, 2022) – Normandin Beaudry, a leader in actuarial consulting services and total rewards, has just released the final results of its Salary Increase Flash Survey. Launched in November 2021, the Company’s compensation specialists polled 285 Canadian companies to gain better insights into the forecasted salary increases budgeted this year in light of high inflation, the Great Resignation, and labour shortages.
Here are the highlights:
More organizations will grant wage increases“Salary increases are anticipated across all sectors and organization types, which differs from last year in which increases were more sector specific. We are now seeing that the labour shortage is impacting all sectors across Canada, thereby putting pressure on employers to increase salaries in order to retain talent,” stated Darcy Clark, Principal, Compensation, at Normandin Beaudry.
Salary freezes for 2022 are planned by less than half a percent of the polled organizations, as compared to 3% reported by the initial survey conducted in summer 2021. This shift showcases the speed at which the market is changing.
Organizations responding quickly to changing market conditionsThe inflation rate, which in 2021 reached a high not seen in a long time, is one of the elements that led 50% of the organizations surveyed to revise their 2022 salary increase budgets. More specifically, the average budget in Canada rose from 2.9% from our initial survey conducted in summer 2021 to 3.4% by late 2021. Additionally, sectors that experienced higher labour shortages revised their budgets more aggressively to compete for staff, specifically in real estate, rental and leasing (+4.2 %), high technology (+3.7%), and foundations, community support and health care (+3.7%).
Additional increases for key employees
Beyond the traditional salary increase budget, 40% of respondents have earmarked 1.2% in additional funds, on average. This increase varies relative to company size, for example, it is 2.9% for organizations with less than 100 employees and 0.7% for those with more than 5,000 employees. Normandin Beaudry’s Market Leader and Principal, Compensation and Performance, Manny Campione, further explained: “These results indicate that organizations plan to use their salary increase budgets as a crucial part of their talent management strategy to both attract and retain employees given the extremely competitive job market. In fact, more than 50% of companies plan to use this additional budget to retain key employees in critical roles, while almost all the remaining plan to use it to differentiate compensation for high performers.”
A high total salary increase budgetThe results from the survey conducted with Canadian organizations forecast a 3.7% increase in budgets on average comprising salary and supplementary considerations. Quebec and Ontario rank highest with budgeted increases of 4.1% and 3.8% respectively. Variations in findings were observed based on company ownership structures, including:
Privately held companies: 4.1%
Not-for-profit companies: 3.9%
Publicly traded companies: 3.4%
Public / Parapublic sector companies: 3.1%
Total rewards are the solutionIncreased monetary compensation will help companies compete in the ’War for Talent’, but a blend of monetary and non-monetary compensation will differentiate organizations amongst its competitors, according to Normandin Beaudry’s compensation consultants.
The full report and the interactive tool, with details by province, industry sector, type of organization and company size, amongst other, can be found on Normandin Beaudry’s website.
Compensation consulting services
Normandin Beaudry’s team of more than 30 compensation consultants is the largest in Canada. Through the sound and innovative use of data and technology, our versatile and creative experts provide their clients with unique and simple solutions that address their strategic and operational needs. For more information, visit: https://www.normandin-beaudry.ca/en/areas-of-expertise/compensation/
About Normandin Beaudry
Founded in 1992, Normandin Beaudry is a leader in actuarial consulting services and total rewards. Close to 300 employees working out of Montreal, Toronto and Quebec City serve clients across Canada in its areas of expertise: Pension and Savings, Pension Plan Administration, Investment Consulting, Group Benefits, Compensation, Health, Performance and Communication.