Manufacturing salaries to rise 2.6% in 2014: survey
By Manufacturing AUTOMATION
By Manufacturing AUTOMATION
Canadian manufacturing companies expect salaries to rise by an average of 2.6 per cent in 2014, according to Morneau Shepell’s annual Compensation Survey.
This is similar to the increase expected for 2013 and also in line with increases actually granted in 2013. This average includes expected salary freezes and excludes promotional or special salary adjustments.
Overall, respondents expect 2014 to be pretty flat in terms of revenue growth, profitability and staffing level.
The manufacturing sector, a key contributor to Canada economic performance, is expected to maintain salary increases in line with the overall average, although some traditional sub-sectors such as printing and paper or wood products are budgeting significantly lower salary increases. Salary budgets are tight as ever and more than 70 per cent of respondents identify the competitiveness of their compensation package as the number one priority on the compensation front.
Respondents in the mining and oil & gas extraction sector expect the greatest salary increases for 2014 at 3.5 per cent on average, but such expectations fall short of the whopping 4.7 per cent granted in 2013 in the oil & gas extraction sector.
Sponsors of defined benefit pension plans continue to struggle with oversized pension costs. The study found 70 per cent of large organizations offering defined benefit plans indicate that this is their top issue for next year. In the last couple of years, nearly 50 per cent of these organizations have either elected for funding relief measures made available in various Canadian jurisdictions or adopted plan changes aimed at reducing the employer pension cost. Also, 15 per cent of those who have not yet implemented employer cost reduction measures intend to do so next year. Such a high level of activity is simply unprecedented, according to the company
Sponsors of defined contribution retirement plans appear to enjoy a much smoother ride then their defined benefit counterparts. Still, the survey found rising concerns by sponsors about the ability for participants to adequately plan for their retirement. Short of increasing the level of contributions to these plans, sponsors are strongly promoting financial education for plan members, including making available sophisticated decision support tools, and simplifying the suite of investment options available to facilitate the plan members decision-making process.
While cost control and disability management come up as the top priorities for 2014 for sponsors of benefits programs, as many as 15 per cent of respondents have improved their health care programs over the last couple of years while 10 per cent plan to implement improvements next year.
Morneau Shepell’s 31st annual Compensation – Trends and Projections survey was conducted between mid-June and mid-August, 2013, with input from more than 300 organizations employing nearly three million people. The benchmark organizations are mostly from the manufacturing (28 per cent), services (26 per cent), and finance (12 per cent) sectors.