IPP&T Magazine Online

Canadian employers boosting salaries to attract top talent

December 3, 2018  

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According to the ninth annual Hays Canada Salary Guide released today, employers across Canada will cap 2018 as a year of growth with more than half intending to hire permanent staff in the year ahead.

While 63 per cent expect the booming economy to add to their bottom line, less than a quarter plan to give salary raises greater than three per cent. The Hays poll also found employers have chosen instead to boost salary offers to entice new candidates – a concerning signal that the country’s employers are struggling in a tight labour market.

Conducted this past fall, the 2019 Hays Canada Salary Guide survey revealed employers had another strong year.

Here are some numbers from relevant industries:

Manufacturing & Logistics

  • Eighty-seven per cent of employers say they are facing a moderate-to-extreme skills shortage;
  • Twenty per cent of employers have increased salaries by more than three per cent in 2018; and
  • Forty-one per cent of employees see their salary as competitive with the market average.

Resources and Mining

  • Twenty-four per cent of employers expect to increase salaries by more than three per cent;
  • Nearly half of employees (46 per cent) see their salary as competitive with the market average; and
  • Almost three-quarters (74 per cent) of employers say they are facing a moderate-to-extreme skills shortage.


Optimism is high and business is thriving as evidenced by the 37 per cent year-over-year increase in the number of companies planning to grow their staff.

Conversely, Hays found employers offering raises of anything more than a cost of living increase has hit a five-year low yet, 61 per cent admit they have hiked salaries to attract candidates even at the risk of potentially losing current staff. Compounding the issue is the fact that nearly three quarters of employers said that a shortage of skilled workers has resulted in heavier employee workloads and heightened stress.

“Despite 2018 success, the negative impact of talent shortages is at its highest point since 2015,” said Rowan O’Grady, president of Hays Canada. “From an employer’s perspective, the job market is extremely competitive and without the right people in place, next year’s business goals could end up in doubt. So, employers have curtailed spending on existing staff in favour of getting new candidates through the door.

“The intent may come from a good place, but this is a band-aid solution for a complicated challenge. Without taking a more holistic view of staffing or having smart support and advice, further workforce problems are all but inevitable.”

Lessons learned and preparing for battle in an employees’ market

A commitment to increasing permanent headcount likely stems from lessons learned in 2017 when unanticipated business growth led to contract staff hiring at double the expected rate. New data suggests that last year’s erroneous forecasting and what was thought to be an unwillingness to commit to long-term staff has since given way to prudent 2019 business planning.

When asked, employers said they expect to take on contract and temporary staff to address the need for special skills but permanent hiring remains a priority within IT (45 per cent) and financial (48 per cent) departments.

Many experts acknowledge that employees have the upper hand in the current job market.

Hays’ labour market experts observed a spike in job vacancies in 2018. New positions and opportunities are being created each day, leading many to shift roles at an increasing rate. This, coupled with stagnating salaries for current employees, will spark churn as the economy continues to soar.

Encouragingly, employers said they have taken steps to protect their talent assets. Slightly more than half of Hays Salary Guide respondents noted that salary is a retention challenge followed by career progression (42 per cent). In response, 53 per cent are working to make compensation and benefits packages more attractive while a similar number (50 per cent) promote their working environments and professional development (39 per cent) among current and prospective employees.

An ongoing companion study conducted by Hays validates this strategy having demonstrated that employees seek salary alongside training opportunities and rewarding culture.

“Many Canadians have followed through on their vow to leave companies that don’t meet their expectations and it’s reassuring to see employers taking ownership of the problem,” added O’Grady. “This is as much about career growth, variety and challenge as it is about salary and many employers have figured that out. All signs point to a tightening employee market in 2019 so, I sincerely hope to see more of this type of action in the year ahead.”