Forget about raises next year says Corporate Canada
[If you’re hoping for a raise next year, we’ve got some bad news for you…]
If you’re hoping to be handed a raise next year, Corporate Canada says forget it.
Base pay for Canadians is only expected to grow by 2.8 per cent in 2017, slightly higher than 2.6 per cent in 2016, according to human resources firm Aon Hewitt’s 2016 Canadian Salary Increase survey of 347 companies. The slight increase keeps pace with inflation but doesn’t signal much hope for Canadians looking to boost their pay. Variable pay – which includes additional compensation like bonuses – is expected to stand at 15.4 per cent for next year, echoing 2016.
“The Canadian companies we surveyed are clearly reluctant to earmark higher compensation increases as they prepare for a highly competitive landscape in 2017,” Suzanne Thomson, senior consultant for global data solutions at Aon Hewitt said in a release highlighting the findings. “On the plus side, fewer of them expect to freeze pay or cut salaries, and they are planning to keep already strong budgets for variable pay intact. That’s a key factor in their ability to attract and retain high performers.”
In 2016, 4.5 per cent of employers froze salaries – predominantly as a result of challenges in the oil and gas sector. In 2017, only 0.4 per cent of employers have plans to lockdown salaries next year.
“For 2017, employers, including those in the oil and gas sector, may be feeling confident that the worst is behind them,” added Thomson. “From an employees’ perspective, there might not be much upside when it comes to pay increases, but they can find some solace in the fact that the downside might be more limited.”
But for go-getters willing to put in effort for a raise or boost their earnings, Corporate Canada seems open to the idea. According to the survey nine out of 10 surveyed organizations offered up some sort of variable pay or bonus plan and so-called high potential employees saw an average “merit increase” to their pay by 4.4 per cent.
Bruce Sandy, principal career and leader coach at Pathfinder Coaching and Consulting in Greater Vancouver says even for employers showing austerity, there are ways for Canadians to grow their compensation outside of their salary.
“Ask for additional paid vacation time, flexibility – like work hours and working remotely – funding for courses and other professional development activities, and/or increased pension contributions,” Sandy told Yahoo Canada Finance. “Indicate that you will be willing to forego a raise this year due to the current economic climate but that you will want higher raises in the near future.”
It’s also important to try and get these sorts of commitments in writing as part of your performance review process. According to the Aon Hewitt survey, two-thirds of organizations say they offered some form of long-term incentive plan whether it is performance-related share grants or restricted stock.
If you’re willing to job-hop for a raise, Sandy recommends networking and seeking out other job opportunities.
“One needs to do their research on different sectors, companies and compensation and pay levels,” he adds. “This will help in current and future negotiations with your current company.”
And if you are serious about moving in order to grow your career, tell your employer.
“Let your current boss know that advancing your career and being appropriately compensated are important to you,” adds the career coach. “As a result of not receiving a raise – or receiving a minimal raise – that you will continue to be open and look for other opportunities both in and out of your current company.”