Average Canadian wages should rise by more in 2020 than they did this year according to a survey of employers.
The Morneau Shepell Salary Projection Survey predicts a 2.7% rise in average wages, increasing from the 2.6% annual rise this year. The increase includes increases in salary structure, length of service, cost of living and merit pay, and excludes salary freezes and promotional adjustments.
It means that Canadian workers will see their paycheque increase by more than the expected rate of inflation for 2020 (2.0% by year-end) and outpace the expected economic growth for the year (1.4%).
"While the Canadian economy is projected to see slowed growth in the coming year, we're expecting to see continued wage increases as a result of the tightening labour market," said Anand Parsan, vice president, compensation consulting practice. "Employers are optimistic about the anticipated growth in 2020. We have seen a steady rise in projected base salary increases over the past few years, with actual numbers equal to or above our forecast since 2017."
Where the biggest gains are
Employees in Newfoundland and Labrador are forecast to see the largest gains in wages (3.1% average) while employers in British Columbia are expecting salary increases of 2.8% and those in Alberta, Ontario and Quebec expect salaries to increase 2.7%. Salary expectations in other provinces range from 2.5 to 2.9 per cent.
"As the war for talent continues and employees become more comfortable negotiating higher salaries and benefits, it's critical that employers design robust compensation strategies to remain competitive," continued Parsan. "We have seen that the most successful employers are those who support the financial, mental, physical and social well-being of their people. By keeping employees healthy and happy, employers are well positioned to improve productivity and make a positive impact on the organization's bottom line."
