Sep. 28, 2022
Businesses Balancing Inflation And Tight Labour Market
Canadian businesses are trying to balance the impact of rising inflationary pressure and a tight labour market. They plan to use compensation as a key part of their talent management strategy as they look to regain some certainty, with just one per cent saying they plan a salary freeze for 2023, says Eckler's inaugural compensation planning survey. The national average base salary increase for 2023 is projected at 4.2 per cent (excluding planned salary freezes), which parallels 2022 actual base salary increases, yet, as many as 44 per cent of organizations are still undecided about salary budgets for 2023. “Salary planning for 2023 has been rife with complexity,” says Anand Parsan, national compensation practice leader at Eckler. “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 per cent will remain constant or push higher as organizations weigh their budget and talent management needs.” British Columbia, Ontario, and Quebec are projecting the highest average salary increases at 4.1 per cent, while Yukon, Nunavut, and Prince Edward Island are projecting the lowest increases between 3.2 and 3.5 per cent.