Special Report on 2009 Salary Forecasts
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Special Report
on 2009 Salary
Forecasts
In keeping with tradition, the CPQ is publishing
its salary estimates for the coming year, with the
cooperation of the best human resources consulting
firms. This overview of salary trends expected in
2009 will allow you, we hope, to develop your own
remunerations strategy. Thanks to the information
contained in the following pages, you can:
• Compare the salary increases projected in
your company with those forecast for your
business sector;
• Assess the salary increases and adjustments
to salary scales in your various employment
categories;
• Learn about the variations in salary growth
among the various provinces.
This publication brings together in a single
document the strategic information of six firms
and, as such, it will allow you to see at a glance the
opinions of experts in human resources. We would
like to extend our thanks once again to our partners
and congratulate them on their rigorous work.
Happy reading!
Michel Kelly-Gagnon
PresidentThe 2008-2009 Pay Increase
Survey from Aon Consulting
The 2009 Pay Increase Survey
conducted by Aon Consulting
gathered data from 304 Canadian Overall1 Results (excluding organizations forecasting freezes)
organizations employing close to
1,200,000 people during end of 2008 Increases 2009 Projections CPI
July to the end of August 2008. Salary Salary Structure Salary Salary Structure August 2007 -
(median) (median) (median) (median) August 2008
Detailed results for salary Canada, including Alberta 3.4% 2.7% 3.4% 2.7% 3.5%
structures and salaries Canada, excluding Alberta 3.3% 2.5% 3.2% 2.6% N/A
Slightly less than 10% of organizations Quebec 3.3% 2.5% 3.2% 2.5% 3.1%
expect to freeze salaries. The data
submitted by these organizations
1
has been excluded in the results In addition to the mentioned budget, about one half of the organizations expect to create an additional budget to address
upcoming promotions. These organizations expect to allocate approximately 1% of the median increase for this purpose.
presented in the first table.
Results by Industry
The salary forecasted increases in
Canada do not vary significantly across
industrial sectors. It is not surprising Results by Job Category
to see that organizations in the natural
resources sector forecasted the highest Canada Canada Quebec
increases (5.0%). The median values 2008 Increases 2009 Projections 2009 Projections
among the other industrial sectors varies Salary Salary Salary Salary Salary Salary
between 3.0% and 3.5% with exception Structure Structure Structure
in the real estate sector (4.0%). (median) (median) (median) (median) (median) (median)
Results by Job Category Executives 3.5% 2.7% 3.5% 2.7% 3.5% 2.5%
The median 2008 pay increases in Managers and professionals 3.5% 2.7% 3.5% 2.7% 3.5% 2.5%
Canada ranged from 3.0% to 3.5%,
Technical and administrative staff 3.5% 2.7% 3.5% 2.7% 3.5% 2.5%
depending on the type of job, while
salary structures increased by 2.5% to Unionized hourly employees 3.0% 2.9% 3.0% 3.0% 2.6% 2.5%
2.9%. The 2009 projections range from Non-unionized hourly employees 3.0% 2.7% 3.0% 3.0% 3.0% 2.5%
3.0% to 3.5% for salaries, and from
2.5% to 2.7% for salary structures, Sales Staff 3.3% 2.5% 3.4% 2.5% 3.1% 2.5%
except for unionized and non-unionized
hourly employees. The second table
presents the detailed median results by
job category.
2Summary of the Hay Group Compensation
Planning Update for 2009
In June and July, Hay Group
conducted its annual compensation
planning update for the upcoming
year. Five hundred and ninety-five
(595) responded: 390 industrial,
96 financial and 187 organizations
from the broader public sector. Overall Weighted Average for Anticipated Increases at a Glance
The first table suggests that Canadian Excluding 0% and Decreases
organizations will provide their
employees salary increases of 3.8% All Sectors Industrial Sector Financial Sector Broader Public Sector
and will increase their compensation
structure or ranges by 3.3%. By including
Base Salary Policy 3.3% 3.1% 3.4% 3.4%
organizations that will freeze their payroll
and leave their ranges untouched, we Base Salary Actual 3.8% 3.7% 3.9% 3.8%
observe the following trends: 3.7% and
2.9% respectively. There seems
to be offsetting sentiment between
lower salary adjustments due to a Including 0% and Decreases
weakening economy versus higher
salary adjustments due to the ongoing All Sectors Industrial Sector Financial Sector Broader Public Sector
war for talent especially within the
commodities sectors.
Base Salary Policy 2.9% 2.7% 3.2% 3.2%
When we look more closely at the Base Salary Actual 3.7% 3.6% 3.8% 3.8%
projections by region (second table), we
see that there is a wide dispersion in the
figures provided by participants, a trend
we’ve seen for the past few years now.
Saskatchewan has overtaken Alberta
as the province with the highest salary
adjustment with a forecast of 5.1% for
Anticipated Increases by Region Including 0% and Decreases
2009, while Alberta is at 4.9%. Atlantic All Sectors
Canada has shown the highest year-
over-year increase coming in at 3.5%, Base Salary Policy Base Salary Actual
which is one-half percentage point Region Increase No. Orgs Increase No. Orgs
higher than last year. Each of these three
regions is experiencing the effect of the
need to attract and retain talent to fuel Atlantic Provinces 3.1% 29 3.5% 35
their commodity sectors. Ontario and
Alberta 3.9% 63 4.9% 74
Quebec, however, are forecasting lower
adjustments than a year ago, coming British Columbia 2.8% 59 3.7% 73
in at 3.3% and 3.2% respectively. Manitoba 3.3% 14 3.6% 14
Both provinces are experiencing the Ontario 2.6% 235 3.3% 265
weakening impacts of the general Québec 2.2% 39 3.2% 41
manufacturing sector, and for the first
Saskatchewan 4.3% 30 5.1% 31
time in memory, have forecasts that are
lower than Atlantic Canada. Yukon, Northwest Territories,
Nunavut * 4 * 4
It is important to note that if we exclude
Saskatchewan and Alberta from the
national average, projected salary Note: * insufficient data.
increases are 3.4% and projected range
increases are 2.6% (Including 0% and
decreases).
32009 Compensation Planning
Survey for Non-Union Employees
Information in the tables opposite
has been extracted from Mercer’s
2009 Compensation Planning Survey
for Non-Union Employees. Data was Executive Management Professional Office/ All
gathered as of June 2008, from (Sales & Clerical/ employees
489 organizations across Canada. Non-Sales) Technician
The first table shows the percentage of Salary increases
salary increases and salary structure
2008 (actual) 4.2% 4.0% 4.0% 3.9% 4.0%
increases in organizations in Canada in
2008 (actual) and 2009 (projected). 2009 (projected) 4.0% 3.8% 3.8% 3.8% 3.8%
The salary and structure increases Salary structure increases
planned for 2009 are slightly lower than
those given in 2008. The planned salary 2008 (actual) 3.1% 3.0% 3.0% 2.9% 3.0%
increase for 2009 (including all groups of 2009 (projected) 2.8% 2.8% 2.8% 2.9% 2.8%
employees) is 3.8%; in 2008 the actual
increase was 4.0%. The salary structure
increase planned for 2009 is 2.8%; in
2008 the actual increase was 3.0%.
Moreover, there is an average difference
of 1.0% between the salary and salary
structure increases, indicating that Salary Increases by Employee Group
organizations allocate a portion of their
salary increase budget for employees to
progress within the salary structure. 50%
3.1% - 4.0%
The second table shows the expected 45%
distribution of increases by job category. 40%
Percentage of organisations
The majority of organizations in the 35%
sample are planning salary increases 4.1% - 5.0%
30%
between 3.1% and 4.0% in 2009 for all
employee groups. 25%
> 5.0%
20%
As for the past two consecutive years,
organizations in the province of Alberta 15%
lead the way, with projected salary 2.1% - 3.0%
10%
increases of 4.0%, followed by 5% 0.1% - 1.0% 1.1% - 2.0%
Manitoba/Saskatchewan (3.9%), British
0%
Columbia (3.8%) and Ontario (3.7%).
Organizations in the province of Quebec Percentage Salary Increases
(excluding the region of Montreal) project
increases of 3.5%; organizations in Executive Management Professional Office/Clerical/Technician
the region of Montreal project salary (Sales & Non-Sales)
increases of 3.6%.
4The Morneau Sobeco Survey on Trends
and Projections in Compensation and
Employee Benefits for 2009
The Morneau Sobeco survey on trends
and projections in compensation and
employee benefits for 2009 is based on
Salary Increase, Canada (%*)
data collected from 282 organizations
representing some 843,000 employees Employee category Projection 2008 Real 2008 Projection 2009
across Canada. The survey was
conducted between June and August
2008 and covers a broad range of Executives 3.4 3.6 3.5
total compensation issues. The tables Management and professional employees 3.3 3.2 3.4
opposite summarize the main findings Technical and administrative personnel 3.3 3.0 3.3
of the 2009 survey with respect to base Operation or production employees 3.1 2.8 3.2
salaries for Canada and more detailed
results for Quebec by sector.
* Excluding provisions for special adjustments and promotions.
Despite the current economic situation
marked by the credit crisis, higher
energy costs and fluctuations in the
Canadian dollar, projections indicate Expected Average Annual Increase for 2009 in Quebec,
substantial salary increases in Canada by Industry Sector and Sub-sector (%)
for 2009. The average salary structure
increase is 2.5%, the same as last Executives Operation or
year. Current economic uncertainty production employees
does not change the reality of an aging
workforce or the challenge of hot skills Structures Salaries Structures Salaries
recruitment and retention, which was
Overall results 2.4 3.4 2.3 3.0
identified as a key issue by a majority
of Canadian employers, including 70% Manufacturing 2.5 3.5 2.6 3.0
in Western Canada and about 60% Food, beverage and tobacco 2.5 3.4 2.7 3.1
in Central Canada, according to the Chemical or allied product 2.8 3.5 2.5 2.9
most recent Morneau Sobeco survey of
Pharmaceutical 2.5 3.8 2.4 3.2
Compensation – Trends and Projections.
Toutes les augmentations
Transportation du salaire de base indiquées dans
equipment 2.4 ce communiqué3.3 sont des augmentations
2.9 3.0
Furthermore, communication of total
générales (incluant les composantes liées au coût de la vie et au mérite). Ces données ont été recueillies
compensation in 2009 is an important Wholesale trade 2.3 3.3 2.4 3.1
durant la période allant de mai à juillet 2008.
issue for close to 40% of employers. Retail trade 2.0 3.3 2.0 3.0
Thirty-five percent of employers
Transport and warehousing 2.5 3.0 2.6 3.0
expect to either review or develop total
compensation statements for their Information industry and cultural industry N/A 3.8 N/A 2.5
employees next year. Participating Finance and insurance 2.2 3.3 2.0 2.9
companies are less optimistic than Credit intermediation and related activities 1.9 3.5 1.0 3.3
in previous years, as shown by the
Insurance carriers and related activities 2.4 3.3 2.3 2.7
percentage of employers who expect a
significant increase in income next year, Professional, scientific and technical services 2.6 3.7 2.3 3.2
which dropped from 18% in 2006 to 16% Design of information technology
last year and 8% this year. In Western systems and related services 2.6 3.8 2.5 3.3
Canada, a quarter of participants still Other private sector services 1.6 3.2 2.1 N/A
expect to considerably increase their
workforce in 2009. But this is true of
only 9% of employers in Ontario, while
close to 7% of employers were planning
significant workforce reductions. For
2009, Canadian employers project an In Quebec, the salary increases reported by 150 organizations should fall into the range of 2.5% to 4.0%
average increase in salary budgets of between the 10th and 90th percentiles and could reach an average of 3.3%. This figure would rise to 3.9%
3.5%, compared to 3.3% last year, or including provisions for special adjustments and promotions. The following table shows the expected
4.1% including provisions for promotions average increase in a number of sectors for two employee categories, excluding such provisions. These
or special adjustments, versus 3.7% for results are based on 155 respondents who reported projections for their operations in Quebec.
2008. The projected average increase in Survey results show that in both Quebec and Canada, employee retention is increasingly dependent on
the salary structure is 2.5%, the same as the integration of non-monetary elements, such as internal equity and communication with employees, in
last year’s survey for 2008. compensation policies.
52008 Salary
Management Survey
Each year, Towers Perrin conducts
a survey of current salary
Report Highlights
management practices and
trends in the Canadian marketplace.
This year, 217 organizations Salary Increase Salary Structure Adjustments
participated in the survey. for 2008-2009 in 2008-2009
The following data have been
extracted from the report issued Percentage of the average salary increase Salary structure average variation rates in 2008
in September 2008 and were granted in 2008 and anticipated in 2009 by the and average rates anticipated in 2009 by the
analyzed for four employee groups 217 participating organizations (by employee group). 217 participating organizations (by employee group).
(Production employees, Technical/
Administrative Support employees,
Management & Professional and 2008 2008
Executive).
Production 3.5% Production 3.0%
Technical/Administrative support 3.6% Technical/Administrative support 2.5%
Conclusions Management & Professional 3.6% Management & Professional 2.5%
Executive 3.8% Executive 2.5%
Salary Increase
• In 2008, an increase was received 2009 2009
by 91% of Production employees,
90% of Support employees, 90% of Production 3.5% Production 3.0%
Management & Professional and Technical/Administrative support 3.6% Technical/Administrative support 2.5%
also 90% of Executive employees,
Management & Professional 3.6% Management & Professional 2.5%
all industries combined.
Executive 3.8% Executive 2.5%
• In 2009, 5% of participating
organizations do not anticipate giving
an increase to Production Employees,
1% to Support Employees, 1% to Note: 0% increases and adjustments are included in the data.
Management & Professional
employees and also 1% of companies
do not anticipate giving an increase
to Executive employees.
Frequency Distributions
Salary Structure Adjustments 2009 Salary Increase Budget Forecasts
• In 2009, 8% of participating
Production Technical/ Management & Executive
organizations do not anticipate
Administrative Support Professional
adjusting salary structure for 50 60 60 50
47.1
Production employees, while 9% of
44.2 53.4
the organizations do not anticipate 45 45
50.6
adjusting Support employees salary
50 50
structure, 8% for Management & 40 40
Professional salary structures and
11% do not anticipate adjusting 35 35
Executive salary structure. 40 40
30 30
% of Companies
Annual Incentive Plans
25 30 30 25 22.5
• 92% of survey participants offer
annual incentive plans to at least 20 19.0
20
one employee group. 19.2
20 18.1 20 15.2
15 12.7 15
• In 2008, the average budget for annual 11.4 13.5
11.8
incentive awards was equal to 22% of 10 10
9.0 8.0
the payroll for Executive employees, 10 6.3 10 7.7
5.1 5.1 5.8
12% for Management & Professional 5 5
4.3
2.5
employees and 6% for Production and 0.7 0.7 1.3 0.6 1.3 1.4 0.8 0.7
0.0 0.0
Support employees. 0 0 0 0
0% 1% 2% 3% 4% 5% 6% 7%+ 0% 1% 2% 3% 4% 5% 6% 7%+ 0% 1% 2% 3% 4% 5% 6% 7%+ 0% 1% 2% 3% 4% 5% 6% 7%+
6Watson Wyatt Data Services 2008-2009
Salary Trends and Forecasts
Alberta employers project highest In 2008, base salary increases across all of Canada averaged 3.61% (compared to last year’s projection of
overall salary increase for 2009 3.50%). Moderate differences existed among geographic regions with Alberta (excluding Calgary) reporting
the highest 2008 salary increase at 3.89%. Quebec (excluding Greater Montreal) reported the lowest average
Professional/Business Services salary increase at 3.19%. Beyond Alberta borders, employees in Saskatchewan received the next highest
firms anticipate highest salary increases averaging 3.61%.
increases for the coming year
Within the industry sectors, the largest overall salary increase occurred among Professional/Business
Services firms, where employees averaged a 4.13% increase, followed by the Banking/Finance sector at
Watson Wyatt Data Services, a wholly-
3.99%. Heading into 2009, these employers are again projecting solid increases at 3.92% and 3.75%,
owned subsidiary of Watson Wyatt
respectively. While specialist roles within finance continue to be competitive, the demand for talent within the
Worldwide, announced results from
engineering field is the driving force behind higher increases being granted within professional firms such as
the 2008/2009 Annual Canadian Salary
engineering consultants.
Survey, now in its 40th year. It reflects
responses from 378 organizations
Not to be left behind, the Public Sector is projecting an overall base salary increase of 3.63% in 2009. In the
reporting data on more than 200,000
quest for talent, Public Sector employers do not have a sufficient short- and long-term incentives to reward
incumbents across 10 major industry
employees and so must ensure their base compensation is competitive, as reflected by average increases in
classifications, 12 regions and major
2008 of 3.74%.
metropolitan areas, and multiple
organization size groups. Collectively,
these 378 organizations employ
940,000 Canadians.
Alberta’s economy continues to impact
The following table summarizes overall base salary increases by region
employers across all regions of Canada,
and major industry grouping:
and increasing base salaries is just
one piece of the total compensation
puzzle employers are drawing upon
to attract and retain employees, as
organizations continue to grapple with
City/Regional Breakdown Industry Sector
staffing shortages.
2008 2009 2008 2009
Alberta (excluding Calgary) employers Actual Forecast Actual Forecast
are leading the way with anticipated
base salary increases of 3.83% for All Canada 3.61% 3.46% All Private Sector-
2009, with Calgary employers predicting For Profit 3.61% 3.47%
Atlantic Canada 3.32% 3.35%
a 3.69% increase. Employers in Public Sector 3.74% 3.63%
neighboring Saskatchewan are projecting Montreal 3.37% 3.26%
base salary increases of 3.50%. While Retail 3.32% 3.26%
Other Quebec 3.19% 3.24%
projections in these regions are slightly Manufacturing
Greater Toronto 3.35% 3.33%
lower than increases actually granted in Non-durable 3.32% 3.35%
2008, it’s likely that 2009 increases will Southwestern Ontario 3.35% 3.34%
Manufacturing Durable 3.71% 3.43%
exceed predictions unless an unexpected
Other Ontario 3.30% 3.41%
downturn occurs. Banking/Finance 3.99% 3.75%
Manitoba 3.38% 3.46%
Insurance 3.64% 3.51%
The overall Canadian base salary Saskatchewan 3.61% 3.50%
increase for 2009 is projected at 3.46%. Professional/Business
In a healthy economy, salary increase Calgary 3.86% 3.69% Services 4.13% 3.92%
projections tend to be somewhat Other Alberta 3.89% 3.83%
conservative – actual increases are
Vancouver 3.48% 3.41%
typically higher than those forecast
in the previous year. If the Canadian Other British Columbia 3.48% 3.37%
economy continues at its current pace
– and there are no imminent signs of a
dramatic downturn – then actual 2009
increases are expected to be higher than
projections provided during the survey
collection period.
All base salary increases reported in this document are general increases (including cost-of-living and
merit components) and were collected May through July, 2008.
7Dossier spécial
sur les prévisions
The Conseil du patronat du Québec would like to thank the participating
firms for their contributions in preparing the 2009 salary forecasts
salariales 2009
Stéphane Paré, Principal Consultant Michel Dubé, Principal Compensation
514.845.6231, extension 4317 Consulting Services
514.392.7802
Jérôme Côté, Senior Consultant Jean-François Vernier, Principal
514.866.7831 514.982.2111
Graphic design: Oblik Communication-design / oblik.ca
Marie-Christine Piron, Principal Consultant Francis Lafrance, Managing Consultant,
514.841.6888 Eastern Canada
514.985.3800
1010 Sherbrooke Street West, Suite 510
Montréal (Québec) H3A 2R7
Tel.: 514.288.5161 / 1 877.288.5161
Fax: 514.288.5165
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