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S A L A R Y
FORECASTSs p e c i a l r e p o r t
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SALARY
FORECASTS
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THE CPQ WOULD LIKE TO THANK THE PARTICIPATING FIRMS FOR THEIR CONTRIBUTIONSIN PREPARING THE 2020 SALARY FORECASTS:
The labour force shortages Quebec has been facing for a number of years now have presented employers with some notable challenges. Raising their profi le and setting themselves apart is pivotal in attracting and retaining the talent they need, and part of these efforts revolve around their capacity to suitably remunerate this talent.
Produced in collaboration with prominent HR consulting fi rms, the Salary Forecasts Special Report offers employers a view of the leading wage trends on the horizon for the coming year. It also presents an overview of results from a survey that looked at wage increases in the non-profi t sector.
By offering you concise forecasts from leading experts in the fi eld, this report aims to help you make informed decisions in developing your business’ compensation strategy. As such, the report gives you the opportunity to:
• Compare your own projected wage increases with those from relevant business sectors;• Evaluate the wage increases and salary scale adjustments of your various employment categories; and,• Learn more about the wage increase gaps between the provinces.
We’d like to extend thanks to our partners for their comprehensive efforts and laudable contributions, year after year, in generating this report. We hope it continues to serve as an indispensable reference to HR professionals and managers across Quebec.
Wishing you an instructive and insightful read,
Yves-Thomas DorvalPresident and CEO
MESSAGE FROM THE PRESIDENT AND CEO
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FORECASTS OF MERCER
Mercer delivers advice and technology-driven solutions that help organizations meet the health, wealth and career needs of a changing workforce. Mercer’s more than 25,000 employees are based in 44 countries and the fi rm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), the world’s leading global professional services fi rm in the areas of risk, strategy and people, with 76,000 colleagues and annualized revenue approaching $17 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment.
Luc Lapalme, MBAPrincipalTel.: [email protected] McGill College Avenue, Suite 800Montreal (Quebec) H3A 3T5mercer.caTwitter @MercerCanada
ABOUT FOR MORE INFORMATION:
MERIT BUDGETS PROJECTED TO REMAIN STEADY IN 2020
Canadian employers have increased their merit budgets to 2.6% in 2020 (iden-tical to the increase in 2019) as employers seek to defi ne their employee value proposition. This increase of 2.6% (which excludes organizations which have implemented a salary freeze) is projected to remain steady in 2020, according to Mercer’s 2019/2020 Compensation Planning Survey for non-union employees in Canada. The data was collected in May and June of 2019 from over 650 Canadian organizations.
Prior to 2019, merit increase budgets had held steady at 2.5% for the preceding three years.
HIGHER FORECASTS WITHIN HOT SECTORS
This year’s topline numbers belie considerable variation sector-by-sector, with ‘hot’ sectors, like technology, choosing to allocate half a percentage point more (3.2%) to merit increases, refl ecting a more robust competition for talent. Excluding the impact of salary freezes, actual and projected salary increases vary from 2.8% to 3.0% for the Mining & Metals, Life Sciences, and High Tech sectors.
ORGANIZATIONS CONTINUE TO INVEST IN SALARY INCREASES
The vast majority of organizations are continuing to invest in salary increases, with only 6.0% reporting a salary freeze for executives in 2019 (vs 6.6% of survey participants in 2018), and only 4.8% reporting a 2019 salary freeze for non-executives (vs 4.6% in 2018).
MANY ORGANIZATIONS HAVE A SEPARATE PROMOTIONAL INCREASE BUDGET, AND DIFFERENTIATE PAY FOR HIGH PERFORMERSS
Consistent with last year 41% of organizations budget separately for promotional increases. The average promotional budget represented 1.1% of payroll in 2019. In addition, high performers received 1.85 times the salary increase of average performers.
FORECASTS GENERALLY CONSISTENT ACROSS CANADA
Excluding the impact of salary freezes, projected salary increases for 2020 fl uctuate between 2.5% and 2.6% across provinces. In the United States, projected salary increases are at 3.0%.
SALARY STRUCTURE ADJUSTMENTS
Overall average actual salary structure adjustments in 2019 were 2.2% and are projected to be 2.3% in 2020.
CONCLUSION
Getting compensation right is critical to your employee value proposition. When you have the right compensation strategy in place, you can bolster employee retention, and build a thriving workforce.
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Morneau Shepell is the leading provider of technology-enabled HR services that delivers an integrated approach to well-being through our cloud-based platform. Our focus is providing everything our clients need to support the mental, physical, social and financial well-being of their people. By improving lives, we improve business. Our approach spans services in employee and family assistance, health and wellness, recognition, pension and benefits administration, retirement and benefits consulting, actuarial and investment services. Morneau Shepell employs approximately 6,000 employees who work with some 24,000 client organizations that use our services in 162 countries. Morneau Shepell is a publicly traded company on the Toronto Stock Exchange (TSX: MSI).
Michel Dubé, Ph.D.Directeur, services-conseils/ PrincipalTel.: [email protected] de la Bourse – Place Victoria800, rue du Square-Victoria bur. 4000 C.P. 211Montréal, QC H4Z 0A4morneaushepell.com
ABOUT FOR MORE INFORMATION:
FORECASTS OF MORNEAU SHEPELL
The annual Morneau Shepell salary projection survey indicates that non-unionized employees could obtain an average salary increase of 2.7 % in 2020. This average excludes salary freezes, which only 1 % of respondents expect; in 2019 the incidence was 7 %. 506 orga-nizations took part in the survey. Revenues were under $50 million for about 30 % of respondents, and over $1 billion for 20 % of respondents.
The highest average salary increases in 2020 in Canada are expected to be in the professional, scientific and technical sector at 3.3 %, and in the public administration sector at 3 %. Respondents anticipate lower than average increases in the arts, entertainment and recreation sector at 2.4 %. Furthermore, 3 out of 4 respondents use salary structures to manage the salaries of non-union employees.
There are no significant differences in forecast salary increases based on operating region or revenues in Canada. The forecast average salary increases in Quebec by industry sector are as follows:
Anticipated increase in base salaries in 2020Salary Structure
Base SalariesIncluding Freezes Excluding Freezes
General Forecasts 1.9% 2.2% 2.7%
Agriculture, Forestry, Fishing and Hunting 1.6% 2.1% 2.2%
Mining and Oil and Gas Extraction 2.0% 2.3% 2.6%
Manufacturing 2.1% 2.2% 2.5%
Utilities 1.3% 1.7% 2.6%
Transportation and Warehousing 2.2% 2.7% 2.6%
Wholesale and Retail Trade 2.2% 2.3% 2.8%
Arts, Entertainment and Recreation 1.9% 2.3% 2.4%
Finance and Insurance 1.8% 2.0% 2.6%
Health Care and Social Assistance 1.8% 2.1% 2.7%
Professional, Scientific and Technical Services 2.0% 2.2% 3.3%
Public Administration 2.4% 2.4% 3.0%
Other service industries and Construction 1.7% 2.0% 2.8%
There are no significant differences in the average salary increase forecasts by benchmarked job categories either. However, the differences in the annual target variable cash compensation bonus are considerable for eligible employees, as follows.
Average bonus target forecasts in Quebec in 2020 Percentages of Base Salaries
Benchmarked job categories From: To:
Executives 31 55
Management 13 25
Professionals 9 16
Technical and Administrative Staff 5 10
Operations and Production Staff 5 9
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In the summer of 2019, 413 organizations—representing more than 1 million employees across Canada—took part in the ninth edition of the Salary Increase Survey.
To present accurate resultats, we offer a new interactive platform using the powerful PowerBI technology.
This new tool gives you the ability to select a combination of our six analytical segments to analyze you data :
• Province • Organization revenue • Organization type • Region • Business sector • Number of employees
Full details of the survey are available on: https://www.normandin-beaudry.ca/en/2020-salary-forecast/
FORECASTS OF NORMANDIN BEAUDRY
• Increases granted in Quebec have surpassed the 3% threshold, a level not seen since 2009.
• As for forecasts for 2020, Quebec and Alberta lead the way in optimism with projected increases of 2.9%, with Ontario trailing close behind at 2.8%.
• While the national average across all sectors is 2.7%, inflationary pressure is particularly pronounced in electronic gaming and visual effects (4.4%), IT consulting services (3.2%), software publishers (3.2%), and e-commerce (3.2%).
• Businesses with fewer than 100 employees are forecasting salary increases above the national average with average increases of 3.1%.
OVERALL SALARY INCREASES FOR NON-UNIONIZED EMPLOYEES BY PROVINCE (EXCLUDING FREEZES)
Founded in 1992, Normandin Beaudry is now recognized as a major player in the field of consultation. Operating from its Montreal, Toronto and Quebec City offices, Normandin Beaudry creates human capital and financial performance with its clients through the excellence of experts ignited by a total rewards mindset. More than 250 employees serve Normandin Beaudry’s Canada-wide clientele by providing advisory services in eight areas of expertise: pension and savings, pension plans administration, investment consulting, group benefits, compensation, health, performance, and communication.
Anna PotvinSenior Consultant, Compensation Tel : 514 285-1122, extention 624 [email protected]
ABOUT FOR MORE INFORMATION:
Total salary increase budget Salary structure increase
PROVINCES n Projected for 2019 (1)
Granted in 2019
Projected for 2020 n Projected for
2019(1)Granted in
2019 Quebec 339 2.7% 3.1% 2.9% 236 2.1% 2.3% 2.3%
Ontario 130 2.6% 2.8% 2.8% 85 1.9% 2.3% 2.3%
British Columbia 72 2.5% 2.7% 2.7% 48 1.9% 2.2% 2.2%
Alberta 73 2.6% 2.8% 2.9% 43 1.9% 2.2% 2.1%
Saskatchewan 32 2.5% 2.7% 2.7% 18 1.8% 1.9% 2.1%
Manitoba 37 2.5% 2.7% 2.6% 20 1.8% 2.1% 2.1%
New Brunswick 42 2.5% 2.7% 2.7% 31 1.8% 2.1% 2.2%
Nova Scotia 38 2.4% 2.8% 2.8% 23 1.8% 2.1% 2.0%
Prince Edward Island 18 2.4% 2.6% 2.7% 12 1.9% 1.9% 2.0%
Newfoundland and Labrador 23 2.5% 2.6% 2.7% 13 1.9% 1.8% 2.1%
CANADIAN AVERAGE 2.5% 2.7% 2.7% 1.9% 2.1% 2.1%
Projected for 2020
(1) Data from the eight edition of the Salary increase Survey.
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FORECASTS OF WILLIS TOWERS WATSON
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.
Lucille Raikes [email protected] Ducharme [email protected], McGill College Avenue, 22e floorMontreal, (Qc) H3A 3J6willistowerswatson.com
ABOUT FOR MORE INFORMATION:
A new survey by Willis Towers Watson, a leading global advisory, broking and solutions company, reveals Canadian employers expect to maintain the status quo on pay raises in 2020. The survey of 384 companies also found employers continue to reward their best performers with significantly larger raises to retain these employees and strengthen their commitment to paying for performance. Employers are also rethinking how to administer limited salary budgets. So while organizations may be forecasting an increase for 2020, the landscape of how and when they are giving increases varies considerably.
HIGHLIGHTS
The Canadian report on salary management indicates that the increase in salary budgets and actual salary structures in 2019 was slightly higher than the forecasts. The national results of salary budget increases by employee group, including zero budgets, are shown in the table below, it should be noted that the projections for 2020 are generally slightly below actual increases in 2019.
Approximately 94% of respondents are projecting base salary increases for some or all employee groups in 2020, down slightly from 96% that have granted increases in 2019.
If we consider only the organizations who will provide an increase and exclude the organizations that plan a salary freeze in 2020, the employees can expect a similar base salary increase next year as what was granted or budgeted this year, with a 2.9% increase. For the change in salary structure, if we exclude the organizations that plan a salary freeze, the increase is in the range of 2.1%.
For the province of Quebec, the projected salary budget increases are similar to the Canadian projections.
With regards to the annual bonus plan, the budgeted payment should be maintained in comparison to 2019.
EMPLOYEE GROUPS
Salary Budget Increase Average Increase (%)
Salary Structure AdjustmentAverage Increase (%)
2019Projected
2019 Actual
2020 Projected
2019 Projected
2019 Actual
2020 Projected
Executives 2.5% 2.6% 2.4% 1.5% 1.4% 1.5%
Supervisors/Management 2.7% 2.8% 2.7% 1.5% 1.5% 1.5%
Professionals 2.7% 2.8% 2.7% 1.5% 1.5% 1.6%
Technical & Business Support 2.7% 2.7% 2.7% 1.5% 1.5% 1.5%
Production/Operations 2.4% 2.3% 2.3% 1.6% 1.5% 1.5%
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FORECASTS OF CENTRE QUÉBÉCOIS DE SERVICES AUX ASSOCIATIONS
The information below is taken from the “Rapport de l’Enquête CARHAO 2019 sur les pratiques et la rémunération des OSBL du Québec”. Full results from the Centre québécois de services aux associations* (CQSA) to be presented in October of this year.
HIGHLIGHTS According to this summer’s CQSA surveys of Quebec’s Not-For-Profits managers, the salary increases projected for 2020 are similar in size to the ones granted for the current year. Organizations expect a 2.4% increase of the salary budget for 2020. On average, this is very similar to the 2.35% budget increase of 2019.
The salary structure’ increases for non-unionized NFP’s are estimated at 2.2% for 2020 (estimated at 2.1% for unionized NFP’s). 2019 was also time for Salary increase adjustments for 18% of respondents since they allowed 4% Salary Budget increases. We expect that year 2020 will be a year of stabilization.
* L’Enquête CARHAO 2019 sur les pratiques et la rémunération des OSBL du Québec is a new study form CARHAO in collaboration with the CQSA and HR firm Dupuis. The study reached a wider scope than the 1500 CQSA’s newsletter readership of 1500 by reaching NFP through social media. The new study will replace the traditional report presented since 2009.In 2019, more than 400 organizations of all size, sectors, scope from all regions of Québec shared data about their HR policies and salaries of their employees. This CARHAO study will be a stepping stone for the creation of an online application aimed at helping NFP establish precise job descriptions, publishing job offers, benchmark policies and salaries with the NFP and the general public job markets.
The Centre québécois de services associations, an initiative of the Regroupement Loisir et Sport du Québec, provides administrative, technical and professional services (insurance, financial management and payroll, legal, graphic design and printing, Information Technology, human resources, telephony, group purchases, travel, education and consulting. CQSA provides direct services to 700 non-for-profit organizations and supports over 10,000 Quebec-based NFP’s in other ways.
ABOUT
Jean-François BeauregardBusiness Development DirectorTel.: 514 [email protected], Pierre-De-Coubertin, Montreal (Qc) H1V 0B2loisirsport.qc.ca
FOR MORE INFORMATION:
LOWER INCREASES FOR 2020
Respondents to our survey indicated that average salary increases for non-managerial positions are estimated at 2.2% for 2020. Furthermore, salary increases (including performance-related bonuses) for managers is projected at 2.4% for 2020. These results are close to results in 2019 for both managers and non-managers. (Table 2)
We also notice that the operating budget size of an organization was the most significant factor on average salary increase in 2019. Budget size is a mirror of all resources available to an NFP; on average, organi-zations with less than 500K $ in budget, offered a limited salary increases of 2.3% in 2019, are expected to offer the same in the upcoming year. NFP’s with mid-size budgets are expected to offer 2.4% increases for 2020 (a tad less than 2.5% in 2019). Larger-size NFPs with over 2M $ in budget limited increases to 2.1 % in 2019 and are expected to offer 1.8 % in 2020. (Table 3)
RETAINING PERSONNEL: 2019, A YEAR OF ADJUSTMENTS
Our latest surveys reveled a major adjustments period for associations. In recent years, Not-for-profits were under pressure for recruiting and retaining of personnel. In fact, 2 out of 10 respondents of our 2019 survey revealed allowing salary increases of 4 % or more this year to compete in the talent market. This result from our summer survey confirmed a global tendency in the last 36 months where associations increased their salary budgets evenly to close the salary gap. These increases are essentially a financial solution to a real society-wide lack of human resources.
A BIT OF A BREAK FOR 2020?
For 2020, in the light of certain funding uncertainties even in a strong economic context, many NFP organizations are remaining very cautious. Most organizations would like to allow themselves a bit of a break by limiting salary increases as much as possible or spreading increases only if necessary.
Table 2: Employee groups overview
Per group Increases (excluding freezes)
Granted in 2019 Projected in 2020
Managers 2.8 % 2.4 %
Non-managers 2.3 % 2.2 %
Table 1: General overview
NFP’s Salary budget Increases (excluding freezes)
Granted in 2019 Projected in 2020
Total budget 2.35 % 2.4 %
Salary structure budget 2.1 % 2.2 %
Table 3: Overview according to NFP’s budget
Operating budget Increases (excluding freezes)
Granted in 2019 Projected in 2020
Lesser than 500k$ 2.3 % 2.3 %
500k$ to 1M$ 2.5 % 2.4 %
1M$ to 2M$ 2.6 % 2.4 %
2M$ to 5M$ 2.3 % 2.3 %
Greater than 5M$ 2.1 % 1.8 %
CONSEIL DU PATRONAT DU QUÉBEC 1010 Sherbrooke Street West, Suite 510 Montreal (Quebec) H3A 2R7
Tel.: 514.288.5161 1 877.288.5161cpq.qc.ca
Graphic D
esign and printing :R
egroupement Loisir et Sport du Q
uébec
