Compensation Increase Planning for 2019

Shawnee Love   •   December 7, 2018

With an impending office move and the jingle and hustle of the holiday season upon us, this will be our last blog of 2018, so I figured it better be a good one.

Hopefully, you agree that a blog which helps you plan for what your people will cost in 2019 meets that goal.

Last week, I blogged on the employer health tax in BC.  I bring this up again, because it pays to remember that compensation increases are more than the actual amount or percentage increase you give, they are compounded by the different taxes employers pay (CPP, EI, Worksafe, and Employer Health Tax for BC) as well as vacation pay (which accrues as a percentage of compensation as well).

Compensation research firms do their own studies each year and come up with their predictions for what compensation increases will be in Canada next year.  The predictions for 2019 are…. (imagine the drumroll)…

Expert Prediction Expert Prediction
Morneau Sheppell 2.6% Mercer 2.5%
Aon 2.8% Willis Towers Watson 2.8%
Conference Board of Canada 2.6% Korn Ferry 3%

That means, the average expected increase for Canadian workers in 2019 is 2.7%.

However, there are VAST differences across Canada in unemployment rates.

And of course, the law of supply and demand applies.  So in provinces where the unemployment rate is very low, we expect raises to be higher to attract new staff and keep the ones we have.  In provinces and territories where unemployment is high, we might see employers holding steady.

Here are the September unemployment rates across Canada.

Location Unemployment Rate
Canada 5.9%
BC 4.2%
Alberta 7.0%
Saskatchewan 6.4%
Manitoba 5.8%
Ontario 5.9%
Quebec 5.3%
PEI 8.7%
Nova Scotia 7.8%
New Brunswick 7.9%
Newfoundland & Labrador 13.6%
Yukon 3.2%
Northwest Territories 4.7%
Nunavut 14.0%

Once you know where your province stands, you can make an informed decision on raises in 2019.  Any questions about planning for wage/ salary increases in 2019, bonuses, or how to create compensation practices which help you attract and retain great staff, we are here to help!

Happy Holidays!