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Salaries leaping in 2012: Conference Board

Rising demand for people with skilled trades and other workers in Western Canada’s booming oil and gas sector will push the national average wage up by more than 3% next year.


October 26, 2011
by CANADIAN PRESS

TORONTO: Rising demand for people with skilled trades and other workers in Western Canada’s booming oil and gas sector will push the national average wage up by more than 3% next year, the Conference Board of Canada predicts.

It says Canada’s average salary increase will be 3.1% for 2012 – up from the actual average gain of 2.7% in 2010 and 3% this year, the forecaster said in a compensation outlook report.

“The signal is to people that are in the labour market already … that they are, for next year, going to be receiving higher wage increases than they’ve seen for the last several years,” said Karla Thorpe, the board’s director of leadership and human resources research.

The Conference Board report is based on a survey of 381 predominantly large and medium-sized organizations that was done in the summer – when the economic outlook appeared brighter than it does now.

The Conference Board study found the smallest wage increases were expected in Ontario and Atlantic Canada, where workers could see average gains of 2.7% next year.

By industry, the weakest growth was expected in retail trades, telecommunications and manufacturing – at about 2.5%. Many of those types of jobs are focused in central Canada.

The oil and gas industry, followed by miners and other resources companies, are expected to see the biggest wage increases, with gains of 4.3% and 4.1%, respectively.

Saskatchewan and Alberta, which have large stores of resources such as potash, uranium, oil and gas, are expected to lead the provinces next year with average wage gains of 3.9 per cent and 3.6 per cent.

In Alberta, expansion of oil sands projects and a growth in pipelines and other infrastructure supporting the energy sector have created labour shortages for everything from carpenters and electricians to welders, steam fitters and construction workers.

Companies who need skilled workers have to offer higher wages and sometimes are forced to turn to workers from the US, other parts of Canada or abroad to meet their labour needs.

In Alberta, three quarters of employers surveyed said they faced labour shortages, Thorpe said, adding that unemployment rates in the Western provinces have fallen faster than the national average.

For example, Saskatchewan’s jobless rate sits at 5%, much lower than the current 7.1% national average.

Dale Pauls, recruiting manager at GFR Recruiting, which hires engineers for the oil sands, says based on the increasing need for those professionals, there will likely be a boost in salaries as companies offer more to land the people they want.

“There’s a shortage of engineers,” he said. “As we try to recruit those engineers, you’re going to see a jump (in salaries).”

As competition heats up for skilled employees, junior engineers that are just starting out now makes about $60,000, an increase from five years ago, he said.

By contrast, manufacturers are coping with the impact of a higher Canadian dollar that makes exports less competitive.

The first members of the hugely influential baby boomer generation turn 65 this year. That means more Canadians are beginning to leave the labour force, reducing the workforce of the oil sector alone by 30% in the next decade, according to a report by the Petroleum Human Resources Council of Canada

Projections of the oil industry’s workforce by the Petroleum HR Council suggest 39,000 workers will be hired just to replace workers lost due to retirement.

In addition to engineers, the council says more employees are needed in the maintenance trades, accounting, field operations, rig crews and environmental and regulatory specialist fields. Over the past year, the economy has created 294,000 new jobs, most full time and most in the private sector.

However, Thorpe warned Canadian companies are still cautiously watching for a potential downturn in the US and Canadian economies, with an eye to adjust their salary distributions depending on how economic growth plays out.

The report also found that more businesses said they planned to maintain their labour bases at current levels or increase them rather than downsize – good news for 1.4 million unemployed Canadians.

The average projected increase in base pay among non-unionized employees in the private sector is 3.2%, while non-unionized public sector workers are expected to see increases of 2.6%.

Anticipated wage increases for unionized employees are projected to be two per cent in 2012, with a 1.5% rise in the public sector and 2.3% gain in the private sector.

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© 2011 The Canadian Press