Quebec survey on salary increases

Normandin Beaudry’s annual survey on salary increases reveals that Quebec salaries are expected to increase by 2.7% in 2016. Salary structures are expected to increase by an average of 1.8%.

The uncertain economic outlook for 2016 and the current economic contraction are causing organizations to be cautious. The final budget of 2.7% granted for 2015 was lower than the initial forecast of budget of 2.9%.

Once again this year, small businesses are setting themselves apart from the market by forecasting salary increase budgets above the provincial average (between 2.8% and 3.1% on average).

Large businesses are the most cautious with forecasts below the Quebec average (2.6%). Forecasts for 2016 for organizations of all sizes are aligned with the increases granted in 2015. In addition to being the most cautious for 2016, large businesses granted salary increases that were lower than what they had forecasted last year.

For the first time in five years, organizations from Quebec City are forecasting salary increases that are lower than those for organizations from Montreal. This difference is more pronounced for technical, administrative and operations personnel.

• Quebec City (projected for 2016: 2.4%, granted in 2015: 2.8%)
• Montreal (projected for 2016: 2.7%, granted in 2015: 2.7%)

Some industry sectors set themselves apart with forecasts higher than the provincial average. These sectors include durable goods manufacturing (3.0%), high technology (3.3%), professional, scientific and technological services (2.9%), the information, culture and recreation industry (3.1%) and the municipal sector (2.9%).

Conversely, some sectors are well below the provincial average. These sectors include transportation and warehousing (1.5%) and education (1.4%). It should be noted that the education sector was the most optimist sector last year with forecasts of 4.2%. In the end, average budgets of 2.0% were granted in this sector for 2015.

Unlike the last two years, salary increase forecasts for privately owned organizations are higher (2.7%) than those for public and parapublic organizations (2.3%).

Quebec organizations with nationwide operations (n=45) expect to grant increases lower than the Quebec average of 2.6%. For the most part, these organizations have stable budgets across the provinces. It is therefore not surprising that the percentages are similar from one province to another, due to uniform policies across provinces of employment. Below are some observations drawn from the sample:

• 68% of organizations granted equal salary increase budgets for all provinces in 2015.
• 90% of organizations granted the same salary structure increase in 2015, and 98% expect to do the same in 2016.

An analysis of the pension plans for organizations that participated in the survey showed that, despite excellent employee participation rates (90% for more than half of the organizations), contribution levels vary greatly from one organization to another. For more than 60% of the organizations surveyed, the average contribution level is less than 10% of the employee’s salary, which may not be sufficient for meeting the retirement income target for the majority of employees. Faced with the challenge of increasing participation and contribution rates, more and more organizations are using the salary increase period to encourage employees to save more. Why not use the next salary increase to promote retirement savings?

The fifth edition of the Quebec survey on salary increases was conducted in the summer of 2015. A total of 160 organizations, including 45 with nationwide operations, representing more than 440,000 employees completed this survey, allowing us to build a reliable database. The data collected was analyzed by Normandin Beaudry’s compensation specialists to identify market trends and present salary forecasts for 2016 that reflect the economic conditions specific to Quebec organisations.

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