Salary increases towards 2023?

Salary increases towards 2023?

Your salary may be about to increase: according to the 12me Salary Increase Survey led by the firm Normandin Beaudry, Canadian organizations forecast an overall increase of 3.8% by 2023. Explanations, in five key points.

Posted at 6:00 am

Stephanie Berube

Stephanie Berube

Economic context: this explains it

“The overall results of this recent survey are not surprising given the current economic environment and ultra-competitive job market,” says Anna Potvin, partner and director of the compensation practice at Normandin Beaudry.

In fact, 3.8% is exactly the increase calculated by the firm for this year, which even exceeds initial forecasts.

It should also be remembered that, last July, Statistics Canada estimated that average weekly earnings increased by 2.5% over a year to reach $1,159. This is a small slowdown since in April, this same increase was 3.2%.

In short, wages are definitely on the rise.

“The trend of accelerating wage growth is not surprising given the tight labor market we find ourselves in today. [nombre de travailleurs disponibles faible par rapport au nombre de postes à pourvoir dans les entreprises]and also because we have been evolving with high inflation for a few months,” says Simon Savard, senior economist at the Institut du Québec.

It is necessary to understand that companies, in a context where the market is very tight, he says, must meet the demands of their employees.

“It offers a lot of opportunities for workers,” says Simon Savard.

Note: the data released on Thursday by the Normandin Beaudry firm focuses on the salaries of positions already occupied within companies, so it excludes labor movements.

If you change jobs and go to another organization that offers you a better salary, it is not a raise, but a new salary.

It should also be noted that these increases remain well below last July’s 7.6% inflation rate.

Variable rate hikes

According to Stephen Gordon, head of the economics department at Université Laval, the planned increases are not generous enough.

“It’s overly modest,” says Professor Gordon, who believes that organisations, whatever they may be, should consider raising salaries at rates close to inflation. “In a situation of labor shortage, I don’t understand this logic,” he says, “especially in a context where people have already lost much of their purchasing power. must be offered [des augmentations] 7% or 8% just to catch up. Back to purchasing power comparable to a year ago. »

Projections relate to planned budgets for salary increases and vary by organization type.

A more generous Quebec

Quebec employees risk seeing their salaries rise a little more significantly, proportionately, as average raise budgets here reach 4.1% by 2023.

“The uptrend is confirmed once again. Labor shortages, the effects of the war in Ukraine and fragile supply chains create a perfect juncture for such wage increases, says Norma Kozhaya, chief economist at the Conseil du patronat du Québec. In such a tight market, employers do not hesitate to use compensation as a lever to retain and attract talent. On the other hand, his room for maneuver in salary terms has limits. This superiority should not undermine its long-term growth and competitiveness. »

Among the organizations that are thinking of increasing their employees’ salaries, some plan to do so more generously. This is particularly the case in the information technology sector, where staff shortages raise these averages to between 4.2% and 5.8%, excluding freezes.

More for the little ones!

According to the study published on Thursday, small companies are reacting with greater agility to the current economic context by offering higher increases, in projection. Organizations with fewer than 50 employees expect an average budget of 4.5%. Those with 50 to 99 employees by 4.1%, and those with 100 to 199 employees by 4.0%, again excluding frost.

“Small organizations generally have lower base salaries,” explains economist Simon Savard. Therefore, they are forced to offer higher salary increases. »

In addition, it is a situation of economic circumstances, specifies Simon Savard. Organizations large or small won’t offer pay increases of this magnitude for long, says the economist.

Less risk of frostbite

Barely 1% of companies have frozen their employees’ salaries this year or plan to do so by 2023.

That’s a big difference, compared to two years ago, when the uncertainty of the pandemic led 10% of companies to implement pay freezes. The pre-pandemic norm was more than 3% to 5%.

Normandin Beaudry’s survey was conducted this summer among 750 organizations representing 1.8 million employees in Canada.

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