After years of sustained inflation and reactive wage adjustments, forecasts for 2025 point to a return to a more stable situation. Indeed, with an inflation rate of 1.5% in Quebec in August 20241, organizations can afford to take a breather and consider more reasonable salary increases than those granted in recent years.
Companies explored all possibilities to improve their compensation offer, even if it meant compromises. Now that the economic storm has subsided, it’s essential to focus on the real value perceived by employees.
Economic Context
Recent economic challenges have influenced wage decisions in Quebec. Although inflation is stabilizing, high prices and interest rates continue to affect workers’ purchasing power, leading to higher wage expectations. Market pressures are still being felt, but organizations want to return to their ability to pay. In 2023, Quebec came close to a recession, which forced organizations to innovate to attract and retain talent. Employers must now rebalance managing costs and valuing employees by listening to their concerns while ensuring economic viability.
Evolution of Salary Package
Historically, companies often tend to allocate salary packages that are higher than the initial forecast. However, in 2023, in the face of recession fears and stagnant growth, the allocated salary package was lower than expected. According to the Ordre des conseillers en ressources humaines agréés‘s latest Rendez-vous Rémunération, the forecast increase in salary structures in Québec is about 2.8%, excluding freezes. At the same time, wage increases, excluding freezes, are projected at 3.5%. These figures show a willingness on the part of organisations to readjust compensation to the economic reality while taking into account the need to attract and retain talent. In 2024, the envelope has finally been aligned with the forecasts and it looks like we can expect a similar trend for 2025.
Return to Balance
As companies have had to deal with a volatile compensation environment, it has become crucial to find a balance between cost management and valuing employees. Organizations can no longer afford to focus solely on the cost of salaries; they also need to consider the value these salaries represent for their employees.
This shift to a value-driven approach requires strategic thinking. Total rewards should not only be seen as a cost, but also as an investment in employee well-being and engagement. A strong corporate culture, supported by recognition and personal development programs, can turn this approach into a real motivational lever.
Value for Employees
According to Solertia’s 2024 Survey on Total Rewards in Quebec*, 70% of respondents consider that employee retention is an issue that affects the organization’s activities. In addition, salary is the second most common reason for leaving employers, after development and career progression.
In this context, salary increases play a key role in employee satisfaction and retention. However, how these increases are perceived is equally important. Organizations need to go beyond the numbers and ensure that employees understand the added value of their contribution to the company’s success. Initiatives such as continuing education, career development opportunities, and wellness programs can increase this sense of worth. Additionally, conducting an engagement survey is a great way to gauge the ROI of these initiatives with employees.
It is crucial to communicate well about these strategies: it is not enough to simply announce raises, it is also necessary to show how they fit into a long-term vision of talent recognition and development.
In Conclusion
The salary forecasts for 2025 open the door to an in-depth reflection on the management of human resources and total rewards. Companies must find a balance between controlling costs and creating value for their employees.
By taking a proactive approach focused on satisfaction and engagement, organizations can position themselves as employers of choice in a competitive job market.
The year 2025 represents an opportunity to reinvent the way companies perceive and value their human resources.
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