New data reveals employers planning more modest compensation increases in 2024 due to easing labour pressures
TORONTO, Sept. 25, 2023 /CNW/ - Today, Mercer released the results of its August 2023 Mercer QuickPulse™ Canada Compensation Planning Survey revealing that although cost of living concerns remain top of mind for many Canadians, employers are projecting a more modest annual increase for both merit and total compensation budgets compared to 2023.
Canadian employers are projecting 3.3% for merit increases and 3.7% for total increase budgets in 2024 compared to 3.6% and 4.1%, respectively for 2023, for non-unionized workers. Total increase budgets include merit increases along with other base pay increases such as promotional pay increases and cost of living adjustments. Although Canada still has an extremely tight labour market, indices show that the market is stabilizing. As a result, the use of pay increases to respond to labour market pressures has slowed down.
"In the face of economic uncertainty and reduced labour market pressure, employer compensation budgets seem to be returning to pre-pandemic levels," said 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."
The survey also highlights how pay transparency is an emerging priority for Canadian employers. British Columbia is one of the first provinces to have passed pay transparency legislation requiring employers to post salary ranges on publicly advertised job postings. The legislation goes into effect November 1, 2023.
The survey found that many Canadian employers overall are taking a less proactive approach, with only 30% agreeing they should have embedded transparency as part of their reward and talent philosophies. What's more, 51% of employers have no plans to go further with pay transparency than required by local law. However, over the last year, the number of Canadian companies who report that they share salary ranges in job postings has nearly doubled, from 8% to 15%.
"Pay transparency legislation continues to push employers to fast forward their policies," added English. "Proactive action will not only help employers get ahead of future legislation, but pay transparency promotes a culture of trust, increases employee perceptions of fair play, is critical in attracting candidates, and ultimately drives higher levels of commitment and engagement."
Mercer's Compensation Planning Survey includes data from more than 500 organizations of varying sizes across 15 industries. You can view more of the survey findings here.
To learn more about the survey results and gain insights directly from Mercer's business leaders, register for Mercer's signature event webinar: Reshaping the future: Total rewards on fast forward.
About Mercer
Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer's approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world's leading professional services firm in the areas of risk, strategy and people, with more than 85,000 colleagues and annual revenue of over $20 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit mercer.com. Follow Mercer on LinkedIn and Twitter.
SOURCE Mercer
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/September2023/25/c0592.html
