Salary increases around 2023?

There may be a salary increase: after April 12e Salary Increase Survey Led by Normandin Beaudry, Canadian organizations are forecasting overall growth of 3.8% in 2023. Explanations, in five key points.

Posted at 6:00 am

Stephanie Berube

Stephanie Berube
The press

Economic context: that explains it

“The overall results of this most recent survey are not surprising given the current economic context and highly competitive job market,” said Anna Potvin, Partner and Head of Compensation practice at Normandin Beaudry.

In fact, 3.8% is exactly the increase the company calculates for this year, beating even the original projections.

It should also be remembered that last July, Statistics Canada estimated that median weekly earnings increased by 2.5% to $1,159 in a year. This is a small deceleration as the same increase was 3.2% in April.

In short, wages are definitely increasing.

“The trend of accelerating wage growth is not surprising given the tight labor market we currently find ourselves in. [nombre de travailleurs disponibles faible par rapport au nombre de postes à pourvoir dans les entreprises]and also because we have been evolving with high inflation for the past few months,” notes Simon Savard, senior economist at the Institut du Québec.

One has to understand that companies in an environment in which the market is very tight have to meet the demands of their employees.

“It offers a lot of opportunities for workers,” says Simon Savard.

Note: Data released Thursday by Normandin Beaudry firm focuses on salaries of positions already filled in companies and therefore excludes labor movements.

Changing jobs and moving to another organization that offers you a better salary is not a raise, it is a new salary.

It should also be noted that these increases are well below the inflation rate of 7.6% last July.

Variable rate hikes

According to Stephen Gordon, Director of Economics at Laval University, the proposed increases are not generous enough.

“That’s overly modest,” says Professor Gordon, who believes companies, whatever they are, should consider raising salaries close to inflation. “In a labor shortage situation, I don’t understand this logic,” he says, “especially in a context where people have already lost a lot of purchasing power. should be offered [des augmentations] 7% or 8% just to catch up. Return to comparable purchasing power as a year ago. »

Projections relate to projected budgets for salary increases and vary by type of organization.

A more generous Quebec

Quebec workers risk seeing their salaries increase relatively more as average budget increases here hit 4.1% for 2023.

“The upward trend is confirmed again. Labor shortages, the effects of the war in Ukraine and the fragility of supply chains create a perfect environment for such wage increases, notes Norma Kozhaya, chief economist at the Conseil du patronat du Quebec. In such a tight market, employers have no hesitation in using compensation as a lever to retain and attract talent. On the other hand, their scope for salary is limited. This superiority should not undermine their growth and long-term competitiveness. »

Among the organizations considering increasing the salaries of their employees, some plan to do so more generously. This is particularly true in the information technology sector, where staff shortages push these averages to between 4.2% and 5.8%, excluding company holidays.

More for the little ones!

Small businesses are more agile in responding to the current economic context by offering predicted larger raises, according to the study released Thursday. Organizations with fewer than 50 employees expect an average budget of 4.5%. Those with 50 to 99 employees up 4.1% and those with 100 to 199 employees up 4.0%, also without lockdowns.

“Small organizations generally have lower base salaries,” explains economist Simon Savard. They are therefore forced to offer higher wage increases. »

In addition, it is a situation of economic circumstances, specifies Simon Savard. Large and small organizations will not be offering salary increases of this magnitude for much longer, says the economist.

Less risk of frost

Just under 1% of companies have frozen their employees’ salaries this year or plan to do so in 2023.

That’s a huge difference from two years ago, when pandemic uncertainty prompted 10% of companies to implement wage freezes. The norm before the pandemic was closer to 3% to 5%.

Normandin Beaudry’s survey was conducted this summer among 750 organizations representing 1.8 million workers in Canada.

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