Canadian employers planning highest pay hikes in two decades

The national average base salary increase for 2023 is projected at 4.2% (excluding planned salary freezes), which parallels 2022 actual base salary increases, found Eckler's inaugural compensation planning survey, released Sept. 27.   

"Salary planning for 2023 has been rife with complexity. We are seeing the highest projected salary increase in two decades as organizations try to balance the impact of rising inflationary pressure and a tight labour market against a backdrop of surging interest rates and anticipated economic downturn. Based on actuals seen in 2022, time will tell if the 4.2% will remain constant or push higher as organizations weigh their budget and talent management needs," stated Anand Parsan, National Compensation Practice leader at Eckler. 

Ecker says its survey results show that Canadian organizations are planning to use compensation as a key part of their talent management strategy as they look to regain some certainty with just 1% of organizations reporting a planned salary freeze for 2023. 

"While we have transitioned away from the conservatism we saw during the pandemic, as organizations look to offset red-hot inflation and a tight labour market, we were surprised to see that there are a fair number of organizations (44%) that remain undecided about salary budgets for 2023. Perhaps this 'wait and see' approach is another attempt to gain some certainty as they look to what their competitors are doing," said Parsan. 

The results by province and industry revealed that British Columbia, Ontario and Quebec are projecting the highest average salary increases at 4.1%.The lowest anticipated salary increases range from 3.2% to 3.5% for the Yukon, Nunavut and Prince Edward Island respectively. 

The highest projected average salary increases by industry are expected to be in information technology (5.4%), membership organizations/professional associations (5.3%), media & telecommunications (5.1%), and construction (5.1%). Education (2.5%), health care (2.7%), agriculture (3.4%) and hospitality (3.5%) reported the lowest projected salary increases.