Wage increases moderate in 2010

September 9, 2010   by PLANT STAFF

Manufacturing pay in 2009 across all categories except union were below 2%.

Photo: IStockphoto

TORONTO: Salary increases have been higher this year than last, but they’re considerably lower than raises paid out earlier in the decade, according to a national salary survey by Hewitt Associates.

The global human resources company with offices in Toronto said its 32nd survey conducted in June/July (involving more than 500 organizations) showed a conservative 2.6% increase nationally, up from the 2.2% awarded in 2009.

Last year manufacturing salaries, including executive level, managers, professionals and specialists, administrative support and hourly, were not only below the national average, but also under 2%. Union members were the exception. Their increase averaged 2.4%. Executive level pay was lowest at 1.6%.

In 2010, most manufacturing categories are looking at a 2.9% increase, except hourly employees who will average 2.8%.

Looking ahead, most manufacturing categories will average 3% in 2011. Professionals and specialists will get 3.1% and hourly workers can look forward to 2.8%. Union members will get the lowest increase at 2.2%.

The results also show a reduction in the number of salary freezes. Last year, nearly three in 10 employers (29.2%) imposed a freeze, 59% of them from manufacturing and 58% of those from Ontario.

This year, the number of freezes dropped to about one in 12 (8.2%). The percentage of organizations considering pay cuts dropped from 9% to less than 1% between 2009 and 2010, while the number planning layoffs fell from 30.7% to 11.8%.

Nine per cent registered pay cuts in 2009 and of those, 60% were from manufacturing. Just one manufacturer expected a pay cut in 2010/2011.

Saskatchewan was the salary increase leader this year as it was in 2009, offering 3.7%, which is down from last year’s 4.2%.

Atlantic Canada was next at 3.3%, followed by Alberta (3.1%), Manitoba (2.9%), Ontario (2.5%) with BC and Quebec recording the lowest increases at 2.4%.

“The differences reflect relative weaknesses in the manufacturing and service industries and relative strengths in mining and energy,” said Toronto-based Hewitt consultant Prashant Chadha.

While the trend is definitely positive, Chadha said the numbers are still lower compared the early part of the decade. “Through 2008, salaried workers could realistically expect pay increases in the range of 3.5% per cent to 4.5%. Now, even a company’s top performers may receive less than 3%.”

He said the turnaround is likely to continue to be slow, since employers are predicting average pay increases nationally of only 2.9% in 2011.

Click here for a copy of the Hewitt Associates’ 32nd annual Canada Salary Increase Survey.

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