A new survey from Aon Hewitt the human resources firm polled 347 Canadian companies about their salary intentions for 2016 and 2017 found that variable pay is expected to average 15.4 per cent of payroll in 2017 — unchanged from this year.
Flat salaries are the result of economic uncertainty, says Aon Hewitt, as Corporate Canada continues to grapple with the crash in oil prices and anemic domestic demand.
Base pay is expected to increase by 2.8 per cent for the average worker in 2017, up slightly from the 2.6 per cent seen in 2016, but not much higher than core inflation.
Companies do see fewer salary freezes next year compared with 2016. Aon Hewitt says that 4.5 per cent of firms surveyed froze salaries in 2016, while only 0.4 per cent expect to have a freeze in 2017.
Canada’s labour market has been deteriorating for two years now, with a steadily rising unemployment rate and stagnant wages. Economists at TD Securities note that the country has averaged only 8,000 new jobs a month in the past six months. The latest job report showed that Canada’s unemployment rate rose from 6.9 per cent to seven per cent in August.
Lower-than-average salary bumps will occur in the oil and gas, banking and transportation sectors. Oil and gas saw the lowest salary expectations, with the average worker expected to see their total salary grow just 1.2 per cent next year.
“While the overall job market may be strengthening slowly, competition for high-performing employees remains high,” said Thomson. – CINEWS