Sunday, September 11, 2005



Globe and Mail

Sept 7, 2005


The price of gas may have you down but cheer up: there win be more money in your pay-cheque next year to help cover a higher fuel bill.

Buoyed by a stronger domestic economy, Canadian employers re­port they are projecting average sal­ary Increases of 3.4 per cent next year, up from an average of 3.2 per cent this year, according to prelimi­nary results from Mercer Human Resource Consulting's 2006 comp­ensation planning survey.

"All this is good news for Cana­dian employees," says Marc Chartrand, a principal in Mercer's Mon­treal office.

"We are seeing optimism not only about salaries but positive growth in all regions and indus­tries."

Employers expect pay increases to average about 3.6 per cent for ex­ecutives, while the average for cleri­cal and hourly staff Is expected to be 3.3 per cent. Only 7 per cent of employers were considering a sala­ry freeze.

The results are based on data from 384 organizations represent­ing approximately 1.6 million unionized and non-unionized em­ployees in Canada.

The employers said, however, that the salary increases may come with more strings attached.

According to the preliminary re­sults, 47.5 per cent of respondents said they already tie compensation to performance and a further 16.8 per cent said they are considering shifting to performance-based sal­ary increases in 2006.

And companies are broadening their offerings of non-monetary awards. Rewards such as extra va­cation time, travel incentives, prizes for being the top performer are already in use by 67 per cent of employers, and another 10.7 per cent have that in their plans for next year. The rest do not have incen­tives and are hot considering them, the survey found.

The top salary increases are ex­pected to be in the oil and gas sec­tor, with an Average overall hike of 4.6 per cent, the survey found. The pharmaceutical and biotechnology sector are next, with projected in­creases of about 3.7 per cent. Natu­ral resources companies and orga­nizations in the public sector are also expecting above-average raises at about 3.5 per cent. There Is! no economic sector in which employers expect an In­crease of less than 3 per cent. And pay hikes will also be rela­tively consistent across the country, the survey found. Employees in Al­berta and British Columbia can ex­pect to see the highest increases at an average of 3.5 per cent. Increases, 3.4 per cent are forecast for Manitoba and Saskatchewan. In Ontario, Quebec arid the Maritimes, forecast increases will be about 3.3 per cent. However, Mr. Chartrand cautions that the survey was conducted in the summer, before the effects of Hurricane Katrina caused oil prices to spike. "We will have to wait and see whether this has a negative im­pact on the economy," he says.


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