‘Significant’ salary increases predicted for 2022
December 20, 2021
“It’s probably the most significant or surprising change in salary increase budget data that I’ve seen in my career in almost 20 years.”
So says Darcy Clark, principal for compensation at Normandin Beaudry in Toronto, looking at predictions for 2022.
In responding to high inflation, the “great resignation” and labour shortages, employers were predicting increases of 2.9 per cent before the summer — but now that’s jumped to 3.3 per cent this fall, excluding salary freezes, he says.
“Companies are cautiously optimistic, but they recognize they can’t just rest on their laurels, in terms of a 2.5-per-cent [increase] isn’t going to cut it, particularly if you had freezes in the year before,” says Clark.
“It’s showing that companies are dead serious about keeping up with the Joneses, so to speak, in terms of competitiveness. So as the market’s moving, you’ve got to move with it, and you’ve got to be aggressive.”
Salary increases
Earlier in the year, employers also had roughly the same number of 2.8 or 2.9 per cent, but when employers delved into issues around retention, and internal equity, that seemed too limited, he says.
“[People realized] ‘It’s not going to solve our problems, any of our problems for that matter.’”
Previously, employers and boards were scared to spend any extra money if they didn’t have to, because of all the unknowns, says Clark.
“But now… they’re more crystallized in terms of direction, what companies are going to do; it’s just a matter of when they’re going to do it.”
In looking at actual salary increase budgets for 2022 (excluding freezes), they average 2.5 per cent, finds a survey of 263 organizations by PCI Compensation Consulting.
Source: HR Reporter
