Canadian workers have something to look forward to in 2014: more money.
While wages in the country aren’t going up by much – an average of between 3 and 4 per cent according to recent surveys – that’s faster than inflation and greater than forecast economic growth of about 2.5 per cent.
Which workers are getting the biggest pay bumps next year? It looks like oil sands employees, technology geeks and finance professionals will be among those most richly rewarded.
Experts say it’s because they have specialized skills and paying them more helps with staff retention, which is a growing problem in some industries.
“Some companies are expanding salary ranges to ensure they are able to hire candidates with the requisite skill sets,” says Robert Half’s 2014 Salary Guide.
Technology positions are expected to see the largest gains at about 5.5 per cent, according to the Robert Half report. That’s followed by a 3.2-per-cent gain for accounting and finance professionals.
A recent Mercer report said oil sands workers will see their pay jump by about 4.2 per cent next year, driven by a skills shortage that is ratcheting up compensation. That means workers out West will continue to see bigger pay hikes than those in other parts of Canada.
"The divide between East and West persists,” the Conference Board of Canada noted recently in releasing its Compensation Planning Outlook 2014.
“Frenzied resource development and near bottom unemployment rates means that Alberta and Saskatchewan are again expecting to offer the highest pay increases next year."
For the rest of Canada, salary increases will be modest, but companies will continue to be frugal as the economy tries to regain its footing following tepid growth below 2 per cent in 2013.
Retention of employees may trump cost cutting
"While Canada's economy is in relatively good shape, growth has been sluggish. For the most part, organizations will be looking to control costs and carefully allocate their compensation dollars," the Conference Board’s Ian Cullwick said recently.
For companies that do hand out larger pay increases, it will be to keep employees happy.
Staff retention is a big concern among employers today. Not only do companies have to offer competitive pay and other benefits, but they also need to support career goals to prevent staff from jumping ship.
“Although companies are steadily improving their retention strategies — for example, by offering flexible work schedules and professional development — high-performing employees are still being approached about opportunities at other firms,” the Robert Half report says. “This underscores the need for competitive salaries and attractive benefits packages and perks.”
Michael Mundy, a partner at executive search firm Odgers Berndtson, says employers looking for C-suite candidates are also mixing up the pay packages with stock units and performances bonuses, but offering less up front.
“The environment of ‘Give it to me now and I’ll earn it later’ isn’t as well received as it once was,” he says.
Still, Mundy says companies are sweetening pay packages to ensure they find the best and brightest, especially at the leadership level.
Variable pay packages are becoming the norm across a number of sectors and jobs, with 81 per cent of global firms offering compensation beyond just the straight paycheque, according to a recent report from human resources firm Aon Hewitt.
That firm is forecasting an average salary bump of 2.9 per cent for Canadians in 2014, which it calls “modest,” yet still the highest level since 2008 when salary increases were 3.7 per cent.
The average Canadian worker saw his or her salary rise 2.8 per cent in 2012 to an average of $47,200, according to Statistics Canada.
Sectors that saw the most gains include professional, scientific and technical services as well as health care and social assistance and, surprisingly, manufacturing. In manufacturing, weekly earnings rose 4.8 per cent to $1,040, according to StatsCan. That compares to a 5.9-per-cent increase in the professional, scientific and technical services sector to $1,263. Among those positions, StatsCan said the largest growth was in areas came in areas that help companies look better, such as advertising, public relations and legal services.