Salary increases: Organizations pressured to be more generous than expected

In September 2021, Normandin Beaudry released the results of its Salary Increase Survey. The results reflect salary increase projections in Canada similar to pre-pandemic levels, averaging 2.8% nationally.

Against a backdrop of high inflation, the “Great Resignation” and a labour shortage, our experts felt it wouldn’t be enough. As a result, Normandin Beaudry launched its flash survey on November 24 to confirm the salary increase budgets for 2022.

In less than two weeks, over 180 Canadian organizations participated in our survey and our assumptions were confirmed. Average salary increase budgets in Canada are more robust than expected, rising from 2.9% before the summer to 3.3% this fall, excluding salary freezes.

Furthermore, approximately 40% of responding organizations are planning to carve out an additional budget of 1.2%, on average. These special budgets will help organizations:

• Respond to rising inflation rates;
• Differentiate merit-based increases for high performers;
• Retain talent in the midst of significant external market pressure;
• Fix internal compensation inequities;
• Catch up with the market with respect to past salary freezes;
• Fund promotions; and
• Maintain a reserve budget for off-cycle market adjustments.

The preliminary results clearly indicate that organizations are trying to respond to the current context.

Normandin Beaudry’s survey is still open until December 24, 2021. All participants will receive a complimentary participant report in January 2022, including a section on compensation practices during the “Great Resignation” era.