Canadian businesses are taking a cautious stand as salary gains in 2017 are expected to be the slowest in two decades.
A national survey of 500 companies across industry sectors by consulting firm Mercer Canada found that employers are projecting record-low salary increases next year, driven by weakness in the energy sector. Mercer Canada said the normally high-paying energy sector will also offer lower salary increases than other major sectors of the economy, which is a reversal from the past.
Raises are projected to be 2.6% across all employee groups, down from 2.8% in 2016 and 3% in 2015. Taking into account expected payroll freezes by some companies, overall pay raises next year are expected to be even lower, at 2.3%, according to the study, which is titled 2016/2017 Canada Compensation Planning Survey.
(Companies in energy-rich Alberta are projecting salary increases below the national average, partly because 40% of energy companies plan to freeze salaries in 2017. Excluding salary freezes, increases in the energy sector are projected to be 2.4%, still below the 2.6% national average.)
When it comes to top performers, however, the survey found that businesses intend to continue giving higher-than-average salary increases. The average salary increase for the top 7% of workers in 2017 is expected to be 4.3%.
The salary projections exclude unionized employees because their increases are predetermined by negotiated agreements and aren’t typically subject to annual modifications depending on the company’s spending plans.
“People are being very cautious and conservative with what they’re planning for salary adjustments next year, primarily as a result of the economic uncertainty in the marketplace,” said Mercer’s Gordon Frost.
If your company is among those expecting to offer lower raises next year, you may want to creatively address the issue taking into account why people come to work in the first place.
So, what exactly makes an employee satisfied? Money, of course, helps, but many studies have shown that as long as employees feel they’re fairly paid, there are many other factors that come into play and determine whether or not they’ll quit or, if they stay, they’ll continue to work hard. Here are 10 approaches to consider that may help keep your staff members content if there’s little cash for raises:
1. Give them a sense of purpose. Employees who have a sense of purpose are more focused, creative and resilient, so managers should make a point of reminding employees how their work is improving people’s lives. Distributing client or customer testimonials and announcing when corporate profits are donated to charities are a couple of ways to do this.
2. Increase benefits. Look into the costs of boosting the fringe benefits you offer. Explore your policies for benefits such as maternity and paternity leave, childcare reimbursements, gym memberships and bonuses for extraordinary performances. You also could offer an extra week’s vacation or a few additional days off.
Generally, employees look for benefits tied to health, family, and financial stability. The good news: Within each of these three categories, there are many creative solutions that don’t necessarily hurt the bottom line.
For example, you could add voluntary supplementary insurance such as life, critical illness or cancer insurance to your existing benefits options. This’ll enhance your offerings with no direct cost to your company. Premiums for voluntary insurance coverage are paid by employees who choose to apply. Voluntary plans help protect employees’ financial security in the event of a covered illness or injury with cash benefits that can go toward copayments, deductibles or any other health-related cost not covered by major medical insurance.
3. Allow flex work. Flexibility is something that employees crave but don’t often get. At some point, most employees need to spend some quality time with their families but are unable to do so, often because of their work schedules..
Flex work can take many forms but it usually involves giving someone the right to change where or when they work to help balance other responsibilities. Reasons for a flexible schedule could include allowing someone to pick up or drop off a child at day care or school, care for a loved one, enroll in a training or education program or participate in traditional indigenous practices such as hunting or fishing.
4. Provide strong interaction. Good communication is vital for keeping employees happy and satisfied. When a situation arises, employees want to be able to contact quickly the best person to help them resolve the issue.
Direct interaction fosters trust, openness and mutual accountability. Those values, in turn, help to create an environment where employees feel empowered to solve problems and try new things without endless meetings and paperwork.
4. Offer training and courses. Tuition reimbursement is a huge perk for employees. You could cover single classes they’re taking, help in their efforts to go back to college to get their degrees, and subsidize courses they’re taking to improve their careers. Training may takes the shape of free online training courses or massive open online courses (MOOCs) such as Coursera or edX. The idea is to help employees work on their careers.
6. Show gratitude. Recognition is one of the biggest rewards employees can get from managers. When they feel appreciated for their work, they become motivated to do more. At their best, formal recognition programs may pay for themselves through reduced turnover — saving the money you’d have to spend to hire and train a replacement.
8. Involve them decision-making. There’s a direct correlation between how involved employees are in decision-making in their department or team and their overall morale, motivation and satisfaction. Including staff in decisions makes them feel like a valued part of the team, and they tend to focus more on problem solving than blaming their problems on management.
9. Ask around. If you really want to know about your employees and keep them satisfied, get their feedback. They can give you insights that you might not have considered before. You may even get feedback about your current reward system. This’ll let you optimise your tactics for keeping them happy.
10. Keep staff in the loop. When employees don’t know what’s going on in their own company, productive time can give way to duplicate or unnecessary efforts. Worse yet, when employees get only part of the story, they’re left to fill in the blanks with gossip, rumors, and worry.
The bottom line is that if you can’t give employees large salary increases, you may be able to compensate them in other ways. Being creative can help foster a positive environment and keep turnover down.