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A Look at Compensation in 2021 and Projected Salary Increases for 2022

published 1 month ago
by admin-client
We’re a year and a half into this pandemic and the world of work has forever changed. When it comes to total compensation, employers and employees are full of questions. And on top of the obligatory safety measures, human resource teams must contend with new expectations in terms of remote work, flex hours, and work-life balance.

When the pandemic first hit, it was impossible to predict how the virus would affect bonus and salary increase budgets for the foreseeable future. Today, only one thing is for sure: in a context of a labour shortage and the robust economic recovery, businesses must stay more than ever in tune with the market. But though the discussion around salary has changed, the overarching goal is and always will remain the same—to attract and retain talent within your company.

As an organization, you need to keep pace with market trends; otherwise, it will be increasingly difficult to catch up. To stay current with workforce expectations, you can refer to the tables below to see our salary adjustments for 2022. Beyond the standard increases, our approach encourages a broader view of total compensation. Included in every compensation package, we believe that employees should be able to benefit from a positive, rewarding, and supportive work experience.

Every year, major human resource firms publish survey results on salary increases taken from a large number of organizations. The results detail salary increases that were granted in the previous year, as well as what employers plan to offer going forward.

For 2022, after more than 18 months under the impact of a global health crisis, companies still anticipate that they will maintain salary increases in the 3% range.[1]

A number of resources summarize the surveys’ findings. For an overview, click on the following link to download your guide to  salary predictions for 2022 (FR); you can also consult The CPQ’s Guide to Salary Predictions for 2022 (FR).

Held on September 22, 2021, the Ordre des CRHA hosted the Rendez-vous de la rémunération [salary summit] where economist Clément Gignac gave a complete review of the Canadian and provincial economies. He focused on the pandemic situation and its economic impact on the country. As we brave the fourth wave of the coronavirus, Quebec and Canada are seeing an encouraging economic recovery. This gradual growth can be attributed to several different elements, including the mass vaccination of the population. In Quebec, the reopening of restaurants and bars has greatly contributed to the rise in employment and the GDP, which have both returned to their pre-pandemic levels.[2] Since March 2020, the unemployment rate regularly fluctuated between 10% and 17%.  We are seeing overall a decline, with levels in August capping at 6.1%.[3] Furthermore as global economic uncertainty continues to wane, people are increasingly willing to spend money. We are therefore anticipating CPI levels to rise above 3% in 2021, falling to around 2% in 2022.

As of September, we have witnessed the recovery of 80% of the 825,900 jobs lost during the height of the pandemic. But in early 2021, 150,000 jobs had yet to be restored. Quebec therefore finds itself amidst an unprecedented situation, with a labour scarcity in certain sectors and significant unemployment rates in others. For many professions, especially for high-skilled workers, there are still a number of excellent job opportunities. However, in other fields, an excess of candidates must compete for a few rare positions. Immigration presents a solution to some of these socioeconomic challenges. Obviously, due to the health crisis, immigration rates were lower in 2020. We expect to make up for this lull in the years to come. If this happens, by 2028, the initial forecast could become a reality.[4]

The table, “Wage and Salary Structure Increases for 2022” presents two types of salary increases:

  • Salary Increases, which correspond to increases for all positions.
  • Structural Increases, which correspond to annual increases applied to the pay scale.

This year, forecasts show that the economic uncertainties associated with the pandemic are significantly lower across all industries. With or without freezes, the difference in forecasts has gone from a variation of 0.3-0.8% last year to 0%-0.2% this year. This means that most organizations do not anticipate a wage freeze for 2022.

This table summarizes key numbers to remember for 2022[5]:

Compensation in 2021 and Salary Increase Predictions for 2022

Quebec

SalariesSalary Structures
Without Freezes2.9 %2.3 %
With Freezes2.9 %2.2 %

 Canada

SalariesSalary Structures
Without Freezes2.8 %2.2 %
With Freezes2.7%2.0 %

*Average wage increases expected for the year 2022, all jobs combined.

Looking at the different industries, IT and communication technologies (+3.4%), finance, and insurance (+3.3%) lead the way in Quebec, while trade (+3.3%), and other service sectors including construction have the best outlook for all of Canada. In contrast, public administration, arts, entertainment and recreation, and health care see more modest increases.[6]

All that said, we cannot ignore the gap between forecasted and actual salaries for 2020 and 2021. This is likely to set a certain tone for 2022. In 2020, increases were projected at 2.7%  while the actual average was 7.8%, a recorded difference of 5.1%. In 2021, increases were projected at 2.4% while the actual average was 5.9%, a recorded difference of 3.5%. The actual 2020 and 2021 values represent growth in average weekly earnings, which has been inflated by pandemic-related assistance, thereby appearing to explain some of this recorded variance.[7]

On that note, we wish you all the best as you embark on your salary forecast and budget for 2022!

Feel free to get in touch with us if you would like more information. We look forward to hearing from you.

The Solertia Compensation Team

info@solertia.ca

[1] Useful resource: Les prévisions salariales 2022, Ordre des conseillers en ressources humaines agréés, p. 5.

[2] Useful resource: Les prévisions salariales 2022, Ordre des conseillers en ressources humaines agréés, p. 8.

[3]  Labour market characteristics by the Institut de la statistique Québec.

[4] State of Labour Market Equilibrium, Updated Medium-Term Diagnostics (2023) for the 500 occupations in the National Occupational Classification.

[5] Useful resource: Les prévisions salariales 2022, Ordre des conseillers en ressources humaines agréés, p. 10

[6] Useful resource: Les prévisions salariales 2022, Ordre des conseillers en ressources humaines agréés, p. 11.

[7] Useful resource: Les prévisions salariales 2022, Ordre des conseillers en ressources humaines agréés, p. 13. Note: Actual Value=Average weekly salary, including overtime (Statistics Canada, SEPH, Table14-10-0203-01).

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