Canadian Manufacturing

Salary increases returning to pre-pandemic levels

The largest organizations in our survey are those expected to grant the most modest pay increases in 2022.

September 15, 2021  by CM Staff

Salary Increases Survey results (CNW Group/Normandin Beaudry, Actuaires conseil inc.)

TORONTO — Normandin Beaudry has just unveiled the results of the 11th edition of its Salary Increase Survey. This summer, 637 organizations—representing more than 1 million employees across Canada— took part in the 2022 edition of the survey conducted by Normandin Beaudry’s team.

The COVID-19 pandemic had a significant impact on the previous summer’s survey as most organizations were compelled to make difficult decisions such as reducing wages, freezing salaries or laying off employees. This year, the economic recovery combined with unprecedented labour shortages might suggest salary increase budgets that are more generous than those we’ve seen in the past 10 years to fill the gap caused by many salary freezes. However, the results of this survey are instead pointing to a return to a level similar to the one before the beginning of the pandemic, which suggests that organizations are continuing to play it safe.

A considerable thaw in salary freezes 
The economic recovery—driven by lower unemployment rates and generalized labour shortages across Canada—is reflected in the sharp drop in salary freezes. While 20% of companies were planning on freezing salaries last summer, only 8% of them actually did so in 2021 and 3% intend on doing so in 2022.

Many sectors playing catch-up
Many sectors that were greatly affected by the crisis are forecasting salary increase budgets for 2022 (excluding freezes) that are more generous than those forecast for 2021, which indicates a desire to catch up. Among those sectors, three are at or above the 3% mark:

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  • Manufacturing: 3%
  • Construction: 3.4%
  • Information Technology: 3.6%

Large organizations remain prudent
The largest organizations in our survey are those expected to grant the most modest pay increases in 2022. The average increase budget is 2.5% for large organizations (those with $1 billion or more in revenue) compared to 3% for smaller organizations ($50 million or less in revenue).

Return to pre-pandemic levels
Although larger budget increases may have been expected to reflect the decrease in uncertainty, rising vaccination numbers and the economic recovery, salary increase budgets for 2021 and 2022 are rather similar to pre-pandemic budgets.

The average national salary increase rose to 2.8% (excluding freezes), a level similar to the one before the beginning of the pandemic.

Despite relatively stable salary increase budgets, the current labour shortage will surely put tremendous pressure on company payrolls. Labour force mobility (turnover, hirings, internal promotions) and the emergence of telework are likely to have serious repercussions on salary inflation, a fact that is not reflected in the salary increase budgets presented above. This is an element that companies must consider in their budget planning.


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