Canadian Employers Conservatively Moved up Salary Increases

The average salary increase was 2.6% nationally in 2010, up from the 2.2% increase awarded in 2009. A press release said Saskatchewan led the country this year, as it did in 2009, with pay increases averaging 3.7%, although this figure represents a decrease from the 4.2% salary increases awarded last year.   

Atlantic Canada had the next highest 2010 salary increases at 3.3%, and Alberta (3.1%), Manitoba (2.9%) and Ontario (2.5%) followed. British Columbia and Quebec had the lowest 2010 increase rates at 2.4%.  

The survey found certain employees at many organizations have the opportunity to earn additional compensation. “Twenty-seven per cent of employers hold some of their compensation budget in reserve to provide additional base pay increases to highest performing employees and 14 per cent provide discretionary restricted stock or stock options,” stated Jeff Vathje, Hewitt’s Calgary-based national compensation leader, in the press release. “In addition, 84% of survey respondents offer variable pay programs.”  

Hewitt said the biggest difference between this year and last year is a reduction in the number of salary freezes. In 2009, nearly three in ten employers (29.2%) imposed a salary freeze, awarding no increases to some or all employees. In 2010, the number of companies with salary freezes dropped to about one in 12 (8.2%).   

Other positive news is that the percentage of organizations considering pay cuts dropped from 9% to less than 1% between 2009 and 2010, and the number planning layoffs fell from 30.7% to 11.8%.