An average employee in Canada is likely to experience a pay raise of around 2.8 percent, a number which is likely to be lower for people involved in the finance and insurance sectors, according to a survey released by the consulting firm
Mercer.
Statistics Canada reports that the survey was held in June – a period when the country was just coming out of a technical recession.
The size of the raise varies across different sectors with tech companies expected to offer a raise of around 3 percent at the high end, and non-financial and retail services at the low end with around 2.6 percent.
According to Gordon Frost, head of the “Canada Talent” section at Mercer, the results reflected the fact that companies are proceeding with caution.
“As base pay increases remain flat, organizations are recognizing that the days of big pay raises may be a thing of the past,” Frost said. “As they struggle to do more with less, they are focusing on other types of rewards like training and career development.”
Around 8 percent of the companies surveyed said that they had frozen salaries in2015. Around 37 percent of these are firms in the energy sector. In 2016, the overall number is expected to drop to around 3 percent.
Employees who perform well can expect a higher pay-raise of around 4.6 percent. But, this is an elite group and comprises only around 7 percent of the workforce. The lowest performing group (around 3 percent) can expect a raise of just 0.2 percent. The majority (57 percent) will get an average raise of 2.6 percent.
Mercer has conducted the survey annually for over 20 years. This year’s survey included 590 companies across a variety of sectors including consumer goods, finance, energy, technology and insurance.
This watchful increase in pay is a reflection of concerns that still persist about the economy. The news that, during the first half of 2015, Canada was experiencing a technical recession did little to allay these worries.
Collapse in oil prices from about US$100 per barrel to the current level of around US$45 had a negative impact on the Canadian economy. But, according to Conference Board of Canada’s chief economist Pedro Antunes, the oil price should rise soon. The current price of oil is too low for producers to maintain output. They have started to lower production, and prices are likely to rise to around US$65 – US$85.
“As base pay increases remain flat, organizations are recognizing that the days of big pay raises may be a thing of the past,” Frost said. “As they struggle to do more with less, they are focusing on other types of rewards like training and career development,” Antunes said.
