TORONTO, Jan. 11, 2021 /CNW Telbec/ - Normandin Beaudry has unveiled the results of its supplemental Salary Increase Survey. In addition to clarifying organizations' intentions for 2021, this edition takes a deeper look at the level of bonuses paid. The analysis studied data from 300 organizations across Canada in November 2020.
Fewer salary freezes
The most recent statistics published by Canada's big banks show that the economy has rebounded despite uncertainty in certain sectors. Furthermore, approximately 7% of organizations expect to freeze salaries in 2021. This forecast is optimistic in comparison to the freezes of more than 20% that we reported from our original Salary Increase Survey conducted during summer 2020. In Ontario, employers seem to be more cautious and expect salary freezes to be greater than 10%.
Despite this optimistic outlook throughout Canada, it will take patience before salary freezes returns to the pre-pandemic levels of 3%.
Signs of confidence in the manufacturing sector
In summer 2020, more than 10% of participating organizations in the manufacturing sector expected to freeze salaries in 2021. Barely six months later, none of these organizations expect to freeze salaries.
This finding likely shows the return of a certain degree of confidence in the economic outlook and organizations' willingness to remain competitive in their market, as they are aware that talent is scarce.
Remaining cautious in 2021
In light of the supplemental survey results, the salary increase forecast across Canada is expected to be 2.6% (excluding freezes), which is very close to the percentage forecast from last summer, 2.7%. This decrease is partly due to the fact that approximately 35% of organizations expect to allocate a budget less than what was initially planned.
Effect of COVID-19 on organizations' revenue and salary increases
Effect of COVID-19 on organizations' |
2021 salary increase budget |
||
% of freezes |
Excl. |
Incl. |
|
Negative impact |
12% |
2.5% |
2.0% |
Neutral or low impact |
7% |
2.6% |
2.5% |
Positive impact |
0.04% |
2.8% |
2.7% |
There is a major gap between the increases excluding and including freezes for organizations that are negatively impacted by the crisis. This is due to a higher percentage of freezes expected in 2021 (12%). In turn, less than 1% of positively impacted organizations expect a freeze for 2021.
A more difficult context for smaller organizations
Our supplemental survey indicated that salary freezes among organizations with fewer than 100 employees more than doubled:
- 16% of freezes expected for organizations with 50 to 100 employees, compared to 4% in July.
- 30% of freezes expected for organizations with fewer than 50 employees, compared to 12% this summer.
For small organizations with 50 to 100 employees that plan to grant salary increases, the budgets are aligned with the national average (2.6%), or slightly higher for very small organizations with fewer than 50 employees (2.8%).
Repercussion on bonus payments
Variable compensation programs have not been spared by the current crisis. More than 25% of organizations expect not to pay any bonuses in 2021, mainly because the 2020 financial results did not meet the set objectives.
For those that plan to pay bonuses, close to half will make payments that are less than 20% of the target bonus. Such low levels have rarely been seen for such a high number of organizations. It should be noted that 25% of organizations that pay bonuses will pay equivalent amounts to more than 80% of the target bonus.
This crisis will make 20% of organizations review their current variable pay programs. Some organizations expect to completely overhaul their programs while others will simply adjust certain performance indicators.
About Normandin Beaudry
Founded in 1992, Normandin Beaudry is a leader in actuarial services consulting and total rewards. Close to 300 employees working out of Montreal, Toronto and Quebec City serve clients across Canada in eight areas of expertise: Pension and Savings, Pension Plan Administration, Investment Consulting, Group Benefits, Compensation, Health, Performance, and Communication.
About our compensation expertise
Our team of compensation consultants is the largest in Canada, with more than 30 diverse experts. Our unique and simple approach is founded upon strategic and targeted interventions, and draws on the smart and innovative use of data and technology to make decisions. For more details, visit https://www.normandin-beaudry.ca/en/areas-of-expertise/compensation/.
SOURCE Normandin Beaudry
Media relations: Marie Anik Aussant, MBA, Partner, Marketing and Corporate Communications, [email protected], 514-285-1122, ext. 267
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