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MERCER’S 2016 COMPENSATION PLANNING ... MERCER’S 2016 COMPENSATION PLANNING SEMINAR ... COMPENSATION

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  • H E A L T H W E A L T H C A R E E R

    M E R C E R ’ S 2 0 1 6 C O M P E N S AT I O N P L A N N I N G S E M I N AR D O I N G M O R E W I T H L E S S

    Regina

    SEPTEMBER 2015

  • © MERCER 2015 1

    T O D AY ’ S P R E S E N T E R S P R E S E N T E R S

    G R A N T A S H L E Y

    I A N C U L L W I C K

  • © MERCER 2015 2

    T O D AY ’ S D I S C U S S I O N

    ECONOMIC OVERVIEW

    01 HIGHLIGHTS FROM THE

    SURVEY

    02 INSIDE

    EMPLOYEES’ MINDS

    03

  • © MERCER 2015 3 © MERCER 2015 3

    ECONOMIC OUTLOOK

  • © MERCER 2015 4

    -1% 0% 1% 2% 3% 4% 5% 6% 7%

    Japan Euro zone North America

    Latin America Asia Pacific Asia Pacific (excl Japan)

    G D

    P %

    G ro

    w th

    2014 2015 2016

    Source: Consensus Economics

    T H E G L O B A L E C O N O M I C O U T L O O K

  • © MERCER 2015 5

    C A N A D I A N E C O N O M I C A N D M A R K E T C O N T E X T O V E R V I E W

    Sources: Economist Intelligence Unit 2015, The Conference Board of Canada “Canadian Outlook Executive Summary” Summer 2015,

    Petroleum Labour Market Information “Falling Oil Prices and Decreased Industry Spending – Employment Impacts” May 2015

    3.5% -6.7% 185,0003.1%

    Expected increase in consumer spending

    Expected World GDP growth in 2015

    Decrease in Canadian exports in May 2015

    Potential loss of direct and indirect jobs in oil and gas industry from

    $31B reduction in expenditures

    CURRENT ECONOMIC STAT E

    There are signs that Canada may bounce back in 2015

  • © MERCER 2015 6

    C A N A D I A N E C O N O M I C A N D M A R K E T C O N T E X T I N D I C A T O R S

    2.0% 2.2% 2.2% 2.4% 1.6% 2.1%

    7.1% 6.2%

    7.0% 6.9% 6.9% 6.9%

    2011 2012 2013 2014 2015* 2016* GDP Unemployment

    3.1% 2.9% 3.0% 3.2% 3.2% 3.0% 2.8% 2.8%

    0.3%

    1.8% 2.9% 1.5% 1.0%

    1.9% 1.5%

    2.3%

    2009 2010 2011 2012 2013 2014 2015* 2016* Salary Increases Inflation

    80% o f c o mp a n i e s r e p o r t e d

    c h a l l e n g e s i n r e c r u i t i n g

    c a n d i d a t e s w i t h c r i t i c a l sk i l l s

    U n e mp l o y me n t i s e xp e c t e d t o f a l l

    b e l o w 6 % b y 2 0 1 8 .

    L a b o u r f o r c e p a r t i c i p a t i o n i s

    c u r r e n t l y a t 6 6 % a n d e xp e c t e d t o

    r e ma i n f l a t f o r t h e n e x t f e w y e a r s .

    Sources: The Conference Board of Canada “Canadian Outlook Executive Summary” Summer 2015, The Conference Board of Canada “The Canadian Context for Strategic Workforce Planning” November 2014

  • © MERCER 2015 7 © MERCER 2015 7

    HIGHLIGHTS FROM THE SURVEY

  • © MERCER 2015 8

    M E R C E R R E S E A R C H

  • © MERCER 2015 9

    P A R T I C I P A N T P R O F I L E

    590 PARTICIPANTS

    18% Services

    (Non-Financial)

    1 %6 Energy

    %7 Financial Services

    %8 High Tech

    %6 Consumer Goods

    %5 Insurance

    %9 Other Non Manufacturing

    Government/Public Administration (3%) | Life Sciences (4%) | Mining & Metals (4%) | Other Durable Goods Manufacturing (6%) | Other Non Durable Goods Manufacturing (3%) |

    Retail & Wholesale (7%) | Transportation Equipment (1%)

  • © MERCER 2015 10

    P A R T I C I P A N T P R O F I L E

    5,000 AND OVER 15%

    3,000–4,999 7%

    1,000–2,999 23%

    500–999 13%

    17% 100–299

    9% 300–499

    NUMBER OF EMPLOYEES

    LESS THAN 100 EMPLOYEES15%

  • © MERCER 2015 11

    E M P L O Y E R S R E M A I N C A U T I O U S – S A L A R Y B U D G E T S R E M A I N S T E A D Y

    YEAR ALLEMPLOYEES EXEC MGMT PROFESSIONAL CLERICAL OPERATIONAL

    2016 2.8% 2.8% 2.8% 2.8% 2.7% 2.7%

    CANADA (ALL INDUSTRIES, ALL LOCATIONS, EXCLUDING ZEROS)

    2015 (ACTUAL) 2.8% 2.8% 2.8% 2.8% 2.7% 2.7%

    2014 (ACTUAL) 3.0% 3.2% 3.1% 3.0% 3.0% 2.9%

    2013 (ACTUAL) 3.2% 3.4% 3.3% 3.1% 3.2% 3.0%

    2012 (ACTUAL) 3.2% 3.2% 3.3% 3.2% 3.2% 3.1%

  • © MERCER 2015 12

    2 0 1 6 S A L A R Y I N C R E A S E P R O J E C T I O N S C O N S I S T E N T W I T H P R I O R Y E A R S

    YEAR ALLEMPLOYEES EXEC MGMT PROFESSIONAL CLERICAL OPERATIONAL

    2016 2.7% 2.7`% 2.7% 2.7% 2.7% 2.7%

    SASKATCHEWAN (ALL INDUSTRIES, EXCLUDING ZEROS)

    2015 (ACTUAL) 2.6% 2.7% 2.6% 2.7% 2.6% 2.7%

    2014 (ACTUAL) 3.0% 3.1% 3.1% 3.0% 2.9% 3.0%

    2013 (ACTUAL) 3.1% 3.1% 3.1% 3.2% 3.1% 3.1%

    2012 (ACTUAL) 3.3% 3.3% 3.4% 3.3% 3.2% 3.1%

  • © MERCER 2015 13

    E M P L O Y E R S R E M A I N C A U T I O U S – R E S U L T S I N C L U D I N G F R E E Z E S

    YEAR ALLEMPLOYEES EXEC MGMT PROFESSIONAL CLERICAL OPERATIONAL

    2016 EXCL. 0’S 2.8% 2.8% 2.8% 2.8% 2.7% 2.7%

    2016 INCL. 0’S 2.6% 2.6% 2.6% 2.6% 2.6% 2.4%

    2016 % OF FREEZES 3% 6% 4% 4% 3% 5%

    CANADA (ALL INDUSTRIES, ALL LOCATIONS)

  • © MERCER 2015 14

    2015 Actual 2016 Projected

    Salary Increase StructureIncrease Salary Increase Structure Increase

    Education & Healthcare Services 2.5% 1.8% 2.2% 1.6%

    Public Sector 2.3% 2.0% 2.7% 2.3%

    E M P L O Y E R S R E M A I N C A U T I O U S – P U B L I C S E C T O R

    CANADA (ALL INDUSTRIES, ALL LOCATIONS, EXCLUDING ZEROS)

  • © MERCER 2015 15

    P R O V I N C E S F O L L O W H I S T O R I C A L T R E N D S 2 0 1 5 P R O J E C T I O N S

    Other Alberta

    Greater Calgary

    Saskatchewan Greater

    Vancouver

    Manitoba

    Greater Montreal

    Other Quebec

    Other Ontario

    Other British Columbia

    Greater Toronto

    Atlantic Canada

    Territories

    3.2

    3.2

    3.12.9

    2.9 2.8

    2.8

    3.0

    3.0

    3.0

    2.9

    2.8

    3.22.6

  • © MERCER 2015 16

    M O R E B A L A N C E D I N C R E A S E S A M O N G S T P R O V I N C E S 2 0 1 6 P R O J E C T I O N S

    Other Alberta

    Greater Calgary

    Saskatchewan Greater

    Vancouver

    Manitoba

    Greater Montreal

    Other Quebec

    Other Ontario

    Other British Columbia

    Greater Toronto

    Atlantic Canada

    Territories

    2.8

    2.7

    2.72.8

    2.7 2.7

    2.7

    2.7

    2.6

    2.7

    2.7

    2.7

    3.22.6 3.0%

  • © MERCER 2015 17

    0

    1

    2

    3

    4

    5

    6

    7

    D I S T R I B U T I O N O F 2 0 1 6 B A S E S A L A R Y I N C R E A S E S 20

    16 Pr

    oj ec

    te d

    B as

    e Sa

    la ry

    In cr

    ea se

    (% )

    MEAN: 2.7% MEDIAN: 3.0%

  • © MERCER 2015 18

    F A C T O R S I N F L U E N C I N G C O M P E N S A T I O N D E C I S I O N S

    RETENTION CONCERNS

    60%

    OVERALL ECONOMIC

    CLIMATE 62%

    ATTRACTION CONCERNS

    53%

    N E E D TO S T R E N G T H E N T H E P E R FO R MA N C E - B A S E D C U LT U R E A N D D E L IV E R “ PAY F O R P E R F O R MA N C E ” ( 4 9% )

    C O N C E R N S R E GA R D IN G E M P LO YE E E N G A G E ME N T LE V E L S ( 44 % ) D E S IR E T O P R O V ID E C A R E E R M OB IL I T Y A N D A D VA N C E ME N T

    O P P O RT U N IT IE S ( 37 % ) O T H E R ( 6% )

  • © MERCER 2015 19

    3.7%

    3.1% 3.1% 3.0% 3.0% 2.9% 2.9% 2.7% 2.7% 2.7%

    L O O K I N G AT H I S T O R I C A L T R E N D S 2 0 1 5 P R O J E C T I O N S

    E N

    E R

    G Y

    O th

    er N

    on D

    ur ab

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    oo ds

    M FG

    S er

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    s (N

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    H ig

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    In su

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    O th

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    nc ia

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    vi ce

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    2015 PROJECTED

  • © MERCER 2015 20

    3.1% 2.8%

    2.6% 2.8% 2.8% 2.7% 2.7%

    2.5% 2.9%

    2.5%

    L O O K I N G AT H I S T O R I C A L T R E N D S 2 0 1 5 A C T U A L S

    2015 PROJECTED 2015 ACTUAL

    E N

    E R

    G Y

    O th

    er N

    on D

    ur ab

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    oo ds

    M FG

    S er

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    s (N

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    In su

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    s

  • © MERCER 2015 21

    2.9% 2.7% 2.6%

    3.0% 2.8% 2.8% 2.7% 2.6%

    2.9% 2.6%

    A R E W E P E S S I M I S T S O R I S T H I S T H E N E W R E A L I T Y ? 2 0 1 6