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Salary freeze thaws in 2010: survey
The number of Canadian employers planning to freeze salaries in 2010 has dropped from 39 per cent to 27 per cent, according to Hewitt's Salary Increase Update Survey of 641 organizations from across Canada.
"The vast majority of employers - 73 per cent as compared to 62 per cent earlier this year - are providing raises in 2010, so that far more workers will get an increase next year than originally projected," said Jeff Vathje, Hewitt's Calgary-based national compensation leader. "2010 salary freezes are still more prevalent than the one or two per cent of organizations that typically opt not to provide raises each year. However, the thaw signifies increased confidence in the economy on the part of employers - and that's good news for employees."
The average salary increase is projected to be 2.6 per cent nationally in 2010, up from the 2.2 per cent increase actually awarded in 2009.
Employees in Alberta, Manitoba and Saskatchewan however, can expect increases that are better than the national average with a projected increase of 3.0 and 3.2 per cent respectively in Alberta and Manitoba. Those in Saskatchewan are forecasting 4.2 per cent increases—the highest in the country.
Companies planning to decrease their original projections are doing so for three main reasons: the organization is undergoing cost reductions (58 per cent), has concerns about the economy (56 per cent), or is reacting to lower increases planned by its competitors (23 per cent).
The survey also indicated that even though 81 per cent of Canadian organizations will not provide a holiday gift or bonus this year, 79 per cent will celebrate the season with employees at a holiday party.
The most popular type of party is for employees and guests, entirely company funded by 61 per cent of employers. Less common is a holiday celebration for employees only (31 per cent), though 84 per cent of employers foot the entire bill for these festivities - on average less than $100 per employee.
"We're seeing a lot of holiday lunches, rather than parties," stated Prashant Chadha, a compensation consultant in Hewitt's Toronto office. "Employers want to celebrate the season with their employees and show their appreciation, but need to keep costs down."
Only 19 per cent of employers plan to give their employees a holiday gift or bonus at the end of 2009: cash (38 per cent), a gift card/certificate (32 per cent) or a company selected gift (22 per cent). However, for most employees, not receiving a holiday gift or bonus will be nothing new. "Only eight per cent of employers who do not currently offer a gift or bonus did so in the past and have discontinued their program," said Chadha. "The primary reason is the cost of these programs."