Canadian Employers Use Variable Comp, Perks to Attract Employees

September 24, 2008 ( - Research conducted by Hewitt Associates finds Canadian organizations are relying on variable compensation (performance-related rewards that must be re-earned each year and do not increase base salary) and, in some locations and for some roles, perquisites to attract, retain, incent and reward key employees.

According to a Hewitt news release, the supply of workers with certain skills or training – particularly engineering and information technology – is so low compared with the demand for these employees that 36% of Canadian organizations make special compensation arrangements outside of base salary to attract and retain them.

The same holds true for certain locations: 63% of employers go to special lengths to recruit and hang onto workers in specific parts of the country, particularly Alberta.

Sign-on and/or retention bonuses, and a living or housing allowance (or housing loan or subsidy) are the most frequently offered monetary arrangements, while non-monetary awards include perquisites such as a cell phone, computer, Internet hook-up, car allowance, flexible work arrangements, assistance in locating housing, and additional vacation time.

In addition, “Eighty-six percent of employers provide variable compensation programs,” said Ian MacRae, a compensation consultant in Hewitt’s Toronto office, in the press release. “Employees receive a bonus if certain corporate, divisional and/or individual goals are attained.”

However, two-thirds of employers reported difficulty in designing pay programs that give employees a clear line of sight between their achievements and their reward. In addition, 61% cited enabling managers to have effective pay conversations with their reports as a challenge.

Copies of the Hewitt Associates’ 30th Annual “Canada Salary Increase Survey” are available at .