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Modest salary increases in 2016

Monday November 09, 2015 Written by  Retain Canada
In a slow-growth Canadian economy, organizations are planning for another year of moderate base salary increases for 2016.

The Conference Board of Canada's Compensation Planning Outlook 2016 projects average increases for non-unionized employees to be 2.6 per cent next year, with the lowest increases going to workers in British Columbia and Alberta.

“Although Canadian organizations are planning salary increases for 2016, employers remain cautious about Canada's economic performance and are opting for modest wage increases, similar to that provided in 2015,” said Lynn Stoudt, vice-president of leadership and human resources research with The Conference Board of Canada. “The effects of the drop in oil prices have been felt most strongly in Alberta and accordingly employers in the province are planning for lower increases.”

Other highlights from the report include:

  • In 2015, 74 per cent of employees received a salary increase, down from 86 per cent who received increases in 2014.
  • The base pay increase for non-unionized employees is expected to average 2.6 per cent in 2016.
  • Workers in Alberta are expected to have one of the lowest average increases in the country at 2.4 per cent, down significantly from the average increases they have seen in recent years.

While salary increases in Alberta outpaced the national average for a number of years, this year workers in the province can expect increases averaging 2.4 per cent, ahead of only British Columbia at 2.3 per cent. Saskatchewan and Manitoba employers have the highest projected average increases of 3.2 per cent and 2.9 per cent, respectively.

The oil and gas and natural resources sectors saw involuntary turnover rates nearly double since last year, increasing to 10.4 and 7.5 per cent, respectively. These changes are not surprising, given decreased investment in the energy sector and supporting industries due to the low price of oil. Overall, employees in the oil and gas industry can expect increases averaging 2.1 per cent in 2016.

Compared with 2014, fewer Canadian employers report challenges recruiting and/or retaining staff. The percentage of organizations experiencing difficulty recruiting and retaining employees this year has decreased to 59 per cent, down from 64 per cent last year. The top professions in highest demand include specialist IT, skilled trades, engineering, management, and sales and marketing.

The 34th edition of the Compensation Planning Outlook summarizes the results of The Conference Board of Canada's annual compensation survey and forecast. A total of 370 organizations participated in the research, which was conducted between June and August 2015.

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