Salary trends for 2023: What can HR leaders expect?

Canadian salaries are on the up, with 42% of employers promising higher starting salaries than ever before. That’s according to Robert Half’s new Salary Trends Report which analyzed compensation trends across the Canadian workforce.

Brace yourself for pay rise requests

The data shed light on what employers can expect at the start of salary season, with HR leaders warned to brace for a slew of pay rise requests. The research found that, despite overall salary growth in Canada, more than half of professionals (57%) feel underpaid with 34% planning to ask for a raise if they don’t get one by year-end. What’s more, four in 10 workers would consider changing organizations for a mere 10% increase in pay.  

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And, in the face of the Great Resignation, can employers really afford to start losing staff over seemingly minimal pay bumps?

“Our data shows workers remain confident with 47% of professionals more likely to request a higher starting salary today compared to a year ago and 57% feeling they’re in the driver’s seat when it comes to negotiating pay, perks and benefits,” Deborah Bottineau, managing director, Robert Half Canada, tells HRD.

And Robert Half isn’t alone in these predictions. A survey by Eckler found that the national average base salary increase for 2023 is projected at 4.2% - which mirrors 2022’s actual base salary increase.

"Salary planning for 2023 has been rife with complexity,” says Anand Parsan, national compensation practice leader at Eckler. “We’re seeing the highest projected salary increase in two decades as organizations try to balance the impact of rising inflationary pressure and a tight labour market against a backdrop of surging interest rates and anticipated economic downturn.”

Inflation woes and in-office anxieties

With workers demanding better salaries in the face of rising inflation, employers should prepare for intense negotiations. For HR leaders, balancing employees needs with organizational expenses can be a minefield. But remember, perks don’t necessarily have to involve pay.

“Beyond pay, employers need to recognize that when it comes to making career decisions, workers are considering the full package with benefits, such as mental health resources and wellness support, flexible work options, opportunities for growth, and a positive organizational culture and values all on the table,” adds Bottineau. “Many workers aren’t afraid to show their worth and are positioning themselves for raises by taking on responsibilities outside of their job description and upskilling. Employers may also face challenges related to return-to-office policies, especially if they’re requiring employees to come back on-site full time. Our research shows 90% of Canadian companies have added new perks to help attract and retain talent, with 38%  offering flextime.”

With separate Robert Half research revealing more than half of professionals would rather quit than return to the office full time, and additional data showing professionals are as productive, if not more so, at home than at the office, it’s important employers demonstrate their purpose in recalling people to the office.

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“To avoid losing valued employees, companies need to communicate why they are asking people to return to the office, clearly outline the benefits of returning, and ensure proper supports are in place to facilitate a smooth transition back,” says Bottineau.

Can HR leaders expect a pay rise?

HR leaders are in increasingly high demand, according to the report. The data from Robert Half found that ‘human resources’ is the number one skill set clients request on a contract basis.

In Toronto, an experienced HR director sitting in the 75th percentile can expect to take home a salary of $153,321, with HR managers and business partners sitting at $132,722 and $102,736 respectively.

What’s more, 61% of managers interviewed said they plan on increasing the amount of contract hires in 2023. And, as far as credentials go, certified human resources executive designations (CHRE) and Batchelor’s degrees are the most in-demand credentials in the Canadian HR sector right now. 

In order to both know your own worth as an HR leader and ensure you’re rewarding your people correctly, it’s important to stay abreast of any salary planning updates. Remember – if your finger's not on the pulse when it comes to pay, then you’ve already lost in the war for talent.

“To prepare for 2023, employers should carefully review their total compensation offerings,” says Bottineau. “Now is also a great time to consider policies around flexible work to ensure they are in line with current trends and worker expectations. Understanding that there is no one-size-fits-all approach, companies should evaluate their offerings and make adjustments where required.”