Canadian employees can expect an average salary increase of 2.6 percent in 2014, according to a national survey of public and private sector employers conducted by Hay Group.

The projected increase is lower than the projection for 2013 – at 2.9 percent – and continues to be relatively close to projected increases of 2.8 percent for American employees. U.S. average projections are also lower for 2014 than they were a year ago, the analysis says.

Projected increases for Canada continue to be much lower than projected increases of 3.7 percent before the economic downturn near the end of the last decade.

More than 500 Canadian organizations provided details of their planned salary adjustments for 2014 for the Hay Group survey, which was conducted in June and July. Participants, officials say, include many of Canada’s leading employers.

The actual base salary changes realized in 2013 were exactly as forecasted for the industrial (2.9 percent) and public sectors (2.5 percent) but noticeably lower in the financial sector (2.6 percent realized against 2.9 percent forecasted);

This year, the highest increases are in the oil and gas sector, the analysis shows, at 4 percent despite the strategic issues in the industry that have caused some moderation in long term investment.

Services (at 3.3 percent), credit unions (at 3.2 percent), chemicals (at 3.1 percent) and utilities (at 3.0 percent) are also forecasting increases that are higher than the national average. These high forecasts, officials say, are a continued reflection of the demand for key skills and experience.
Not surprisingly, Newfoundland and Labrador (at 4.0 percent), Saskatchewan (at 3.4 percent) and Alberta (at 3.2 percent), lead the country, buoyed by the demand for key skills in the resource industries despite the challenges in these markets.

Saskatchewan and Newfoundland – two of last year’s biggest winners – have the highest 2014 base salary projections, officials say.

Projections for Alberta in 2014 are lower than they were in 2013, but still rank third highest in Canada, according to the analysis.

A clear divide between the provinces continues, the research says, with resource-rich provinces coming in between 3.2 percent and 4.0 percent, with the rest of Canada predicting increases of 2.1 percent to 2.6 percent, all of them at or below the national average.
Meanwhile, the sectors with the lowest projections for 2013 are leisure/hospitality (at 2.0 percent), retail, consumer durables, and forestry & paper – all at 2.1 percent. Overall, the public sector is forecasting noticeably lower salary increases (at 2.3 percent) than is the private sector (industrial and financial at 2.7 percent).

Canadian projections rank about average against some industrialized nations, including:

  • France (at 2.5 percent);
  • Italy (at 2.2 percent);
  • Japan (at 2.0 percent).

Still, it lags behind others, including:

  • U.S. (at 2.8 percent);
  • UK (at 2.9 percent):
  • India (at 10.8 percent);
  • China (9.0 percent);
  • Russia (at 8.0 percent).

It’s important to keep in mind, officials say, that projections for China and Russia in 2014, while still far higher than most economies, have moderated between one-half to 1 percent from those made for 2013, while the projections for India have increased by more than one-half percent over 2013.
Meanwhile, the opportunity to receive short-term incentives has increased for Canadian senior and middle management in the private sector, but there are fewer opportunities for employees at the supervisory and clerical levels.

About Hay Group
Hay Group is a global management consulting firm that works with leaders to transform strategy into reality. We develop talent, organize people to be more effective and motivate them to perform at their best. Our focus is on making change happen and helping people and organizations realize their potential.


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