More than one in five will also likely increase pay further in 2020
Investing in salary growth is in the cards for most employers in the coming months, with nearly three in five organizations (57%) planning to continue the strategy throughout 2020, a new report from Mercer Canada showed.
The budget for increases rose 2.6% this year. While the majority of employers are predicting the same rate of pay increase in 2020, more than one in five (22%) will likely raise salaries even further, Mercer Canada said.
The top motivations behind investing in salary increases include:
- Increased talent competition or labour shortage (28%)
- Change in base salary strategy (22%)
- Accounting for any salary freeze or delayed salary growth in previous years (21%)
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“Getting compensation right is critical to your employee value proposition,” said Gordon Frost, partner and career business leader at Mercer Canada.
Adjustments in compensation are based on the following factors: talent retention (72%), talent attraction (70%), and promoting a performance-based culture (50%).
“When you have the right compensation strategy in place, you can bolster employee retention and build a thriving workforce,” Frost said.
Other employers (21%), on the other hand, are predicted to lower their budget within a year, while a smaller share of organizations will likely see a salary freeze for executive (6%) and non-executive (4.8%) roles.
Companies that are planning to rein in their budget for salary hikes cite the following reasons:
- Economic uncertainty (24%)
- General cost reduction (24%)
- Change in base salary strategy (19%)