How to ask for a pay raise amid rising inflation
Canadian employers are putting aside less money for compensation in their 2024 budgets as labour market pressures ease, according to recent survey data from a human resources consulting firm.
Mercer released the results of its August QuickPulse Canada Compensation Planning Survey on Monday. It found that employers are projecting “more modest” annual increases for compensation budgets in the upcoming year.
For non-unionized workers, the survey found that employers are projecting 3.3 per cent for merit increases and 3.7 per cent for total compensation budget increases for 2024, compared to 3.6 per cent and 4.1 per cent respectively for 2023.
“Although Canada still has an extremely tight labour market, indices show that the market is stabilizing,” Mercer said in a press release Monday. “As a result, the use of pay increases to respond to labour market pressures has slowed down.”
The findings mark a shift by employers back to pre-pandemic level compensation budgets, says Elizabeth English, principal in Mercer Canada's Career Products business.
“If Canada’s labour market continues to cool over the next few months, it could reduce pressure on 2024 compensation budgets even further,” she said in a news release on the survey data.
Mercer’s survey also highlighted the growing prioritization of pay transparency in job postings for employers and applicants.
Some jurisdictions, such as British Columbia and Prince Edward Island, have passed legislation mandating that employers post salary ranges on publicly advertised job postings.
“Pay transparency legislation continues to push employers to fast-forward their policies,” English said.
While the majority of Canadian employers said they have no plans to go further with pay transparency than what is required by law, the number of companies over the past year who reported having shared salary ranges in job postings nearly doubled, according to the survey.
English said that employers who are proactive with pay transparency policies will have an advantage in the future, as it promotes a culture of trust amongst employees.
“(Pay transparency) is critical in attracting candidates, and ultimately drives higher levels of commitment and engagement,” she said.