Canadian employers expect salaries to rise 2.8 per cent in 2015: report

Go ahead, ask for that raise.

A new survey says you’re boss may have already budgeted for it, especially if you work in the resource sector, a scientific or technical job, or in one of the three Prairie provinces.

The problem is that the raise they plan to pay, on average, may not be much higher than inflation, which is on the rise.

A new survey from Morneau Shepell says Canadian employers are expecting salaries to rise 2.8 per cent in 2015, up from the 2.6 per cent expectation this year.

“Employers are relatively optimistic about the coming year,” stated Michel Dubé, a principal in Morneau Shepell’s Compensation Consulting Practice, in releasing the 32nd annual Compensation and Trends in Human Resources survey.

The mining and oil and gas sectors plan to offer biggest salary boost, an average increase of about 3.4 per cent, although that’s down from the 3.9 per cent increase anticipated last year. People who work in the professional, scientific and technical services industries can expect an average increase of about 3 per cent, according to employers surveyed in those sectors.

Workers in the resource rich provinces of Saskatchewan and Alberta can expect bigger salary bumps, at an average of 3.4 per cent in each place, followed by Manitoba at 3 per cent and B.C. at 2.8 per cent. The rest of Canada is below the national average, between 2.5 and 2.7 per cent, the survey shows.

The average includes expected salary freezes and excludes promotional or special salary adjustments, Morneau Shepell says.

Growing revenues and a need to retain talent, are helping drive the projected pay increases.

“Those expecting a significant increase in revenue, operating budgets and staffing outnumber those expecting decreases by four to one,” says Dubé.

People work in wholesale and retail trade will need to lower their expectations a bit though. The survey says they should only expect salary increases of 2.4 per cent next year.

That’s on par with the current annual inflation rate, which rose 2.4 per cent in June, a 28-month high, according to the latest data available from Statistics Canada. It’s the second straight month that inflation has exceeded the Bank of Canada’s target of 2 per cent.

Investment not just about money

The Morneau Shepell survey says business are still cautious about handing out salary increases. It says companies also plan to invest in programs to help improve employee engagement and productivity. About half of the survey respondents pointed to priorities such as improving the communication of total rewards programs, training and development programs, and workplace health and well-being.

The salary survey comes amid ongoing reports that Canadian businesses remain skeptical about spending, suggesting a lack of confidence in Canada’s economic recovery.

The Conference Board of Canada released a report this week calling Canada’s economic outlook “humdrum,” and pointing a finger at slow business spending.

It’s forecasting that Canada's economy will grow just 2 per cent in 2014, citing in part “weak business investment intentions” and sluggish job creation.

“The business sector seems to be holding back on investment, governments are by and large in fiscal restraint mode for the foreseeable future, and weak labour income growth, coupled with higher inflation, is eroding the purchasing power of households,” the Conference Board said.