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Aug 31, 2010

New data reveal that salary increases are steadily on the rise among Canadian organizations

Two recent salary surveys indicate that Canadian employers seem to be cautiously optimistic about continuing economic recovery in 2011.

Chief among the findings of the recently released Towers Watson Data Services 2010/2011 Salary Budget Survey Report was that the increased percentage of responding organizations projecting salary increases. Among the 200 survey participants, 98 per cent project salary increases for 2011, up from 95 per cent in 2010 and 70 per cent actually granting increases in 2009.

Meanwhile, nearing the completion of its data harvesting period, Aon's annual Pay Increase Survey shows strong signs that organizations are slowing down on freezing salaries. Among the 184 organizations surveyed to date, only 1 out of 25 participants expect to freeze salaries in 2011. This is a dramatic difference from previous years when 1 out of 6 respondents implemented salary freezes in 2010 compared to 1 out of 3 in 2009 (see details www.aon.ca/surveys/rr/Aug-RapidReady.pdf).

All five surveyed groups plan salary increases, says Towers
The Towers Watson report, conducted between May and June 2010, provides data on actual salary increases granted for 2009, budgeted for 2010 and projected for 2011.

Some of this report's other key findings are listed below:
  • For 2011, within organizations that plan to grant increases, average salary increases are projected to be higher than those budgeted for 2010 for all five employee groups surveyed (executive, management, professional/technical, administrative/support and hourly). Base salaries are expected to rise next year by an average of 3.1 per cent for executives; 3.0 per cent for management; 2.9 per cent for professional/technical and administrative/support groups; and 3.0 per cent for the hourly group.
  • More organizations are expected to adjust salary range midpoints in 2011 versus organizations that already adjusted or plan to adjust salary range midpoints in 2010
  • For all employee groups, the budgeted incentive/bonus pools are higher than those originally projected for 2010

The 2010/2011 Salary Budget Survey Report is available online, or as an online/printed report set.

Towers Watson Data Services (TWDS) is a leading provider of compensation, benefits and employment practices information to the global employer community. From offices around the world we solicit, analyze and publish an extensive library of online, printed and interactive survey reports. Our compensation databases are recognized worldwide as the most reliable source of current data for compensation planning.


Initial results of Aon's Pay Increase Survey expect salary jump of 3 per cent in 2011
Aon notes that the preliminary findings of its survey also identify overall diminishing trend of salary freezes since 2009 downturn. Overall, the dampening impact on salaries caused by the 2009 economic crisis is subsiding. Most employers are expecting to be in a position to afford more aggressive salary increases than they have implemented in recent years.

Initial data is indicating that organizations are earmarking higher salary increases than in 2010. Aon’s projections agree with those from Towers Watson, indicating that salary increase budgets will be approximately 3 per cent of payroll in 2011. In recent years, organizations have overall remained cautious with salary increases, Aon's preliminary survey results indicate that organizations allocated a salary increase budget of 2.5 per cent in 2010. In addition, organizations are holding salary structure increases steady at 2 per cent.

"While these are preliminary results, it nonetheless reflects an overriding upward momentum among Canadian organizations with respect to annual employee pay increases," notes Scott Bunker, national leader of the firm's Human Capital practice, "We look forward to sharing our final analysis in the fall, along with any knowledge and insights that will complement data regarding the evolving total rewards landscape."

Aon Consulting is one of Canada's leading integrated human capital consulting and outsourcing firms. Our more than 800 Canadian professionals in 12 offices coast-to-coast offer benefits, talent management and rewards strategies and solutions to help clients attract, retain and develop world-class talent. Driven by inspired and independent thinking, Aon Consulting is committed to delivering innovative and personalized business solutions with tangible value to help clients shape their organization into the workplace of the future. For more information, visit http://aon.ca
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