Manufacturing salaries expected to increase in 2013, study says

Salaries in Canada’s manufacturing sector are projected to increase between 3.1 and 3.3 per cent for employees and 2.4 per cent for unionized workers in 2013, according to a new survey.

 The 34th annual Canada Salary Increase Survey  from Aon Hewitt, the global human resources consulting and outsourcing solutions business of Aon Corporation surveyed 162 manufacturing organizations to look for salary increases.

The study found that 2013 projected salary increases show a slight improvement over the actual 2012 salary increases, which on average were 3.0 per cent.

In 2013, 3.3 per cent of organizations reported a salary freeze, while only 1.7 per cent are forecasting a freeze for 2013. The decline in organizations reporting a salary freeze mirrors trends witnessed prior to the economic downturn in the third quarter of 2008.

“The percentage of organizations reporting a salary freeze has steadily declined since 2009, when almost a third of organizations froze salaries,” Suzanne Thomson, a senior associate with Aon Hewitt in Toronto, said in a statement.

This year’s survey also reveals that some organizations have reported changes to their approach in granting base salary increases. Organizations are opting for approaches that focus on merit increases or pay for performance strategies. Others are granting more lump sum payments in lieu of increases or they are putting more pay at risk by increasing the variable pay component and reducing salary increases.

The survey also indicates that 30 per cent of organizations use special compensation arrangements for hot skills jobs. The most popular monetary hot skill arrangements are additional base pay, sign-on bonuses and retention bonuses.  Non-monetary arrangements to attract and retain those with hot skills include flexible work arrangements.

“Employee attraction and retention continue to be important issues in many sectors. Employers need to develop strategies to not only retain, but to engage their high performers,” Susan Hunter, national leader of Aon Hewitt’s rewards group, said.