Canadian Organizations Cautiously Optimistic with Respect to Projected 2013 Salary Increases, According to Aon Hewitt

Employers are getting creative in attracting and retaining high performers

TORONTO, Sept. 24, 2012 /CNW/ - Data from the 34^th annual Canada Salary Increase Survey projects average salary increases of 3.1 per cent in 2013 across all employee groups and industries, according to Aon Hewitt, the global human resources consulting and outsourcing solutions business of Aon Corporation (NYSE: AON). In total, 422 employers responded to the survey, conducted between the months of July and August. Participants include 260 Services organizations and 162 Manufacturing organizations.

2013 projected salary increases show a slight improvement over the actual 2012 salary increases, which on average were 3.0 per cent. "2013 salary increases are actually projected to range from 2.5 percent for Unionized employees to 3.3 percent for Managers and Supervisors," stated Suzanne Thomson, a senior associate with Aon Hewitt in Toronto.

Projected 2013 salary increases in the manufacturing sector are between 3.1 percent and 3.3 percent for all employee groups where the projected salary increase for Unionized employees is 2.4 percent.

In 2013, 3.3 percent of organizations reported a salary freeze, while only 1.7% are forecasting a freeze for 2013. The decline in organizations reporting a salary freeze mirrors trends witnessed prior to the economic downturn in the third quarter of 2008. "The percentage of organizations reporting a salary freeze has steadily declined since 2009, when almost a third of organizations froze salaries", said Thomson.

Overall Salary Increase Budget

	Executive Group				Manager/ Supervisor				Professional/ Specialise				Admin Support				Hourly				Union
	2012		2013		2012		2013		2012		2013		2012		2013		2012		2013		2012		2013
Manufacturing	3.4%		3.2%		3.3%		3.3%		3.3%		3.3%		3.2%		3.2%		3.0%		3.1%		2.4%		2.4%
Service	3.1%		3.1%		3.2%		3.2%		3.1%		3.1%		3.0%		3.0%		2.6%		2.7%		2.3%		2.6%
All Organizations	3.2%		3.2%		3.3%		3.3%		3.2%		3.2%		3.1%		3.1%		2.8%		2.9%		2.4%		2.5%

Note : 2012 data is actual, 2013 data is projected.

Changing approaches to granting base salary increases
This year's survey reveals that some organizations have reported changes to their approach in granting base salary increases. Organizations are opting for approaches that focus on merit increases or pay for performance strategies. Others are granting more lump sum payments in lieu of increases or they are putting more pay at risk by increasing the variable pay component and reducing salary increases.

The survey also indicates that 30 percent of organizations use special compensation arrangements for hot skills jobs. The most popular monetary hot skill arrangements are additional base pay, sign-on bonuses and retention bonuses.  Non-monetary arrangements to attract and retain those with hot skills include flexible work arrangements.

"Employee attraction and retention continue to be important issues in many sectors. Employers need to develop strategies to not only retain, but to engage their high performers," says by Susan Hunter, national leader of Aon Hewitt's rewards group.

Hunter mentions that the following are the most prevalent challenges organizations are facing on a day-to-day basis:

1. Maintaining market competitiveness of our pay levels
2. Raising the ability of managers to have effective pay conversations with their people
3. Enhancing total reward packages to better attract talent
4. Pay programs that give employees a clear line-of-sight between effort/achievement and rewards.

To order a copy of Aon Hewitt's 2012-2013 Canada Salary Increase Survey Planning Report, please contact [email protected].

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About Aon Hewitt
Aon Hewitt is the global leader in human resources solutions. The company partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance. Aon Hewitt designs, implements, communicates, and administers a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies.  With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees. For more information on Aon Hewitt, please visit www.aonhewitt.com.

About Aon
Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 61,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship with Manchester United.

 

SOURCE: AON Hewitt

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