According to Gallagher’s 2020/2021 Salary Planning Survey – Canada Edition, 62 percent of employers implemented wage increases before the pandemic. However, as the economic realities of COVID-19 set in towards the end of the first quarter of 2020, many organizations were forced to downsize staff, implement hiring freezes, and cut corporate budgets. ‘salary increase. As a result, 38% of employers reported that their pay raise plans had been changed for 2020 – a trend that will continue into 2021.
As Canadian employers plan for the year ahead, nearly half (43%) of organizations have changed their salary increase plans in 2021 due to COVID-19. Of employers who expect their 2021 wage increase plans to be negatively affected, 45% plan to cut increases, 35% plan to halt increases and freeze wages, while 6% plan to cut increases. cut wages next year.
“Market responses to the pandemic and the economic downturn are putting downward pressure on Canadian wages and employers tell us these pay restraint measures will last until next year,” said Melanie Jeannotte , CEO of Gallagher’s Benefits and HR Division in Canada. “The impact of COVID-19 on costs and revenues will be unpredictable in the coming year, leading many employers to reconsider wage increases in an effort to preserve jobs in 2021.”
“Employer priorities have changed in the wake of the pandemic, and leaders have moved from acquiring and retaining talent to financial stability and business continuity,” said Jeannotte. “However, while many employers have sought to cut spending in response to COVID-19, it is essential to remember that employee well-being and engagement remain key components of business performance. As employers review total cost reward structures to reflect new financial realities, it is imperative that they meet the evolving needs of their employees as well. ”
“Business as usual” has lost all meaning in 2020. Coexistence with COVID-19 has required an unprecedented level of adaptability, but employees are looking for stability more than anything, “Jeannotte said. “Employers who can find the right balance between reducing costs and investing in the financial, physical and mental health of their employees will be in a better position to retain staff and fight for new talent when the labor market recovers. “