Canadian Manufacturing

Survey of employers projects more salary freezes ahead

An average salary increase of about 1.6% including freezes was reported by 13% of firms; down from a 2.4% in 2019

September 29, 2020  The Canadian Press

TORONTO — Winter is coming and this year the forecast includes more salary freezes because of COVID-19.

Human resources consulting firm Morneau Shepell says 13% of the 889 organizations it monitors say they plan to freeze salaries in 2021.

That’s far more than last year’s pre-COVID survey, which incorrectly predicted only 2% of organizations would freeze salaries this year.

As things turned out, Morneau Shepell later determined that 36% of organizations actually froze their salaries in 2020 because of the economic impact of the pandemic.

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The firm estimates the 2020 weighted national average salary increase will be about 1.6% including freezes — down from a 2.4% average increase in 2019 and the first time since 2008 that the increase was below 2%.

It says Alberta has been hardest hit this year, with average base salaries up only 1.4% if salary freezes are included, and the province is expected to lag other parts of the country again in 2021.

Morneau Shepell says 16% of employers in Alberta “are expecting more salary freezes, more than any other province, driven in large part by a dramatic decline in commodity prices.”

On a national scale, the projected 2021 salary increase including salary freezes is 1.9% — with Alberta’s increase projected to be 1.7%.

“This year’s results are some of the most concerning that we’ve seen since the survey’s inception in 1982,” Morneau Shepell vice-president Anand Parsan said in a statement.

“With nearly half (46%) 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,” Parsan said.


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