A new survey found that Canadian employers are expecting the highest pay rise in two decades as they try to balance inflationary pressures, soaring interest rates, recession risks and a tight labor market.
According to a report by consulting firm Eckler Ltd., the national average base wage is expected to increase by 4.2% next year, excluding the planned wage freeze, which will parallel the actual base wage increase in 2022. The 2022 salary increase is expected to be lower than the actual figure.
British Columbia, Ontario and Quebec are expected to see the highest average wage increases, while Yukon, Nunavut and Prince Edward Island are expected to see the lowest.
The largest average wage increase is expected to be in the tech sector, at 5.4%.
The smallest increases are expected in education, healthcare, agriculture and hospitality.
Anand Parsan, head of Eckler’s national compensation practice, said the 2023 compensation plan was fraught with complications.
The findings also show that Canadian organizations are planning to make compensation a key part of their talent management strategy, with only 1 per cent reporting plans to freeze wages in 2023.
Additionally, 44% of organizations have still not decided on their 2023 salary budget.
Meanwhile, new research from talent solutions and business consulting firm Robert Half found that wages remain the top concern for Canadian workers, with 57 per cent of professionals saying they feel underpaid.
The study found that 34% of workers plan to ask for a raise by the end of the year if they don’t get a raise or the amount is lower than expected, while 37% would consider changing jobs for a 10% raise.
47% of professionals are more likely to demand a higher starting salary today than they were 12 months ago.
The research also shows that employers are stepping up their salaries to compete for talent, with 42% offering higher starting salaries.
In addition, 79% of managers who increased the base pay of new employees in the past year also made pay adjustments to existing employees.