A new survey has found that Canadian employers expect the highest salary increases in two decades as they try to balance inflationary pressures, rising interest rates, recession risks, and a tight labor market. According to a report by consulting firm Eckler Ltd, the average national base salary increase for the next year is expected to reach 4.2 percent, excluding planned salary freezes, which matches the actual base salary increases for 2022, where expected salary increases for 2022 were lower than the actual figures. British Columbia, Ontario, and Quebec are expected to have the highest average salary increases, while Yukon, Nunavut, and Prince Edward Island are expected to have the lowest.

The largest increase in average salaries is expected in the technology sector at 5.4 percent. The lowest increases will be in the education, healthcare, agriculture, and hospitality sectors. In this regard, Anand Barsan, National Compensation Practice Leader at Eckler, said that salary planning for 2023 was complex. The survey results also show that Canadian organizations plan to use bonuses as a key part of their talent management strategy, with only one percent of institutions reporting a planned salary freeze for 2023. Additionally, 44 percent of organizations remain hesitant about their 2023 salary budgets.

Meanwhile, new research from Robert Half Talent Solutions and Business Consulting found that salary remains the top priority for Canadian workers, with 57 percent of professionals saying they feel underpaid. The research found that 34% of workers plan to request a bonus by the end of the year if they do not receive a raise or if the amount is less than expected, while 37% might consider changing jobs for a 10% salary increase. Additionally, 47 percent of professionals are more likely to ask for a higher starting salary today compared to 12 months ago.

The research also showed that employers are stepping up when it comes to compensation to attract talent, with 42 percent offering higher starting salaries. Moreover, 79 percent of managers who increased the base compensation for new employees last year also made adjustments to the wages of existing employees.