3 in 5 Canadian bosses plan to raise wages

More than one in five will also likely increase pay further in 2020

3 in 5 Canadian bosses plan to raise wages

Investing in salary growth is in the cards for most employers in the coming months, with nearly three in five organizations (57%) planning to continue the strategy throughout 2020, a new report from Mercer Canada showed.

The budget for increases rose 2.6% this year. While the majority of employers are predicting the same rate of pay increase in 2020, more than one in five (22%) will likely raise salaries even further, Mercer Canada said.

The top motivations behind investing in salary increases include:

  • Increased talent competition or labour shortage (28%)
  • Change in base salary strategy (22%)
  • Accounting for any salary freeze or delayed salary growth in previous years (21%)

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“Getting compensation right is critical to your employee value proposition,” said Gordon Frost, partner and career business leader at Mercer Canada.

Adjustments in compensation are based on the following factors: talent retention (72%), talent attraction (70%), and promoting a performance-based culture (50%).

 “When you have the right compensation strategy in place, you can bolster employee retention and build a thriving workforce,” Frost said.

Other employers (21%), on the other hand, are predicted to lower their budget within a year, while a smaller share of organizations will likely see a salary freeze for executive (6%) and non-executive (4.8%) roles.

Companies that are planning to rein in their budget for salary hikes cite the following reasons:

  • Economic uncertainty (24%)
  • General cost reduction (24%)
  • Change in base salary strategy (19%)

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