TORONTO — If you were hoping 2021 might bring some financial stability and maybe a modest raise, a new survey suggests not to keep your hopes up.
According to Morneau Shepell’s annual Salary Projection Survey, 46 per cent of Canadian employers are unsure about whether to freeze salaries in 2021, while 13 per cent have already committed to do so, leading the agency to suggest salaries may only increase by 1.9 per cent in 2021.
This would be an improvement from 2020, however, when salaries only increased by 1.6 per cent, the smallest increase since the 2008 financial crisis.
“This year’s results are some of the most concerning that we’ve seen since the survey’s inception in 1982,” Anand Parsan, vice president of Morneau Shepell’s compensation consulting practice, said in a news release.
“With nearly half of employers reporting uncertainty going into 2021, it’s important that Canadians recognize the impact on their financial wellbeing as we expect another challenging year.”
The survey also found that 36 per cent of Canadian organizations were forced to freeze salaries during the pandemic, compared to the projected 2 per cent before the year began.
When it comes to individual industries “Management of companies and enterprises” (0.6 per cent) is expected to have the lowest salary increases in 2021, followed closely by “Arts, entertainment and recreation” (0.8 per cent) and Educational services (0.8 per cent). On the other hand, “Administrative and support, waste management and remediation services” (3 per cent) and “Utilities” (2.4 per cent) are expected to have the largest salary increases.
Additionally, 58 per cent of real estate employers don’t anticipate wage freezes in 2021, while 42 per cent of employers in the arts, entertainment and recreation industries have already committed to freezing salaries next year.
When broken down provincially, the survey found that 16 per cent of employers in Alberta are expecting more salary freezes in 2021, while less than 10 per cent of businesses in New Brunswick, Nova Scotia and Newfoundland and Labrador are anticipating salary freezes.
Given the financial challenges anticipated for the foreseeable future, Parsan suggests employers should provide programs for employees who might be struggling.
“Employers should revisit their total rewards strategy and consider what they can do to support their employees in such times, including access to financial education, access to resources and emotional support, as financial stress has a huge impact on overall wellbeing, resiliency and productivity of the workforce,” he said.