As Canadian employers plan for the year ahead, nearly half (43 per cent) of organizations have modified their salary increase plans for 2021 due to the COVID-19 pandemic.
Those are the findings from the 2020/2021 Salary Planning Survey for Canada from global consulting firm Gallagher. The survey captured data from business leaders, human-resources professionals, and financial practitioners from 226 companies.
While nearly two thirds (62 per cent) of Canadian employers increased their employees’ compensation packages before the pandemic hit, things have changed. The survey found that employees at 45 per cent of companies can expect to receive a smaller raise than was originally expected for next year, while 35 per cent will see their salary frozen, and 6 per cent will actually see their pay decrease.
Hiring and retaining talent aren’t the priorities for most companies right now, as business leaders struggle to keep the lights on.
Melanie Jeannotte, CEO of Gallagher’s Benefits & HR Consulting division in Canada, explains, “The impact COVID-19 will have on costs and revenue will be unpredictable in the year ahead, which is causing many employers to reconsider salary increases in an effort to preserve jobs in 2021,” she said . “Employers’ priorities have changed as a result of the pandemic, and leaders have shifted their focus from talent acquisition and retention to financial stability and business continuity.”
The unprecedented and unpredictable business landscape that most companies are facing right now means that increased profits and growing market share are unlikely for many organizations. As a direct consequence, few employees are apt to see a significant increase in their salary for 2021.
“‘Business as usual’ lost all meaning in 2020. Co-existing with COVID-19 has required an unprecedented level of adaptability, however employees are looking for stability more than anything,” Jeannotte sums up. “Employers who can strike the right balance between cutting costs and investing in their employees’ financial, physical and mental health will be better positioned to retain staff and compete for new talent when the labour market picks up.”
You can read more about the Gallagher survey and Canadian employers compentation plans for the coming year here.
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