Healthcare and education sectors face compensation freezes, while Western provinces lead salary growth
Eckler's third annual compensation planning survey projects a national average base salary increase of 3.6 percent for 2025, slightly below the 2024 actual increase of 3.8 percent.
Anand Parsan, National Compensation Practice leader at Eckler, explained, “As inflationary pressures dissipate, planned salary increases are moderating more slowly; resulting in larger real compensation increases for employees. We are beginning to see a reversion to pre-pandemic norms.”
The survey indicates increased certainty in salary budget planning for 2025, with only 18 percent of organizations undecided about their salary budgets, a significant drop from the 58 percent uncertainty reported in 2024.
Parsan also noted that with the labour market rebalancing, organizations are now focusing on managing their compensation programs, including how they communicate their total rewards packages, transparency in compensation, and ensuring the effectiveness and equity of their pay structures.
Some sectors, however, are facing tighter budgets. A significant portion of healthcare organizations (44 percent) and education organizations (21 percent) are planning compensation freezes for 2025.
Western provinces, particularly Alberta and British Columbia, are forecasting the highest average salary increases, ranging from 3.6 percent to 3.9 percent, with British Columbia at the top.
In contrast, the lowest salary increases are expected in Yukon and Prince Edward Island, with projections of 3.1 percent and 3.2 percent, respectively. Other provinces are forecasting increases between 3.3 percent and 3.5 percent.
By industry, the highest projected average salary increase is expected in real estate, at 4.2 percent, while the healthcare and education sectors anticipate the lowest increases at 2.8 percent and 2.9 percent, respectively, even when removing compensation freezes.
The survey also highlights key HR initiatives for 2025, with many organizations prioritizing job descriptions and salary benchmarking.
Respondents reported that 56.1 percent are focusing on maintaining up-to-date job descriptions, while 55.4 percent plan to participate in salary benchmark surveys. Additionally, 46.6 percent of organizations are working to enhance their total rewards strategies to be more flexible and employee centric.
Other top HR initiatives include compensation training for people leaders (36.3 percent), adopting new or enhanced compensation management systems (31.5 percent), and conducting pay equity analyses (30.6 percent).
Employers are facing increased pressure regarding pay transparency, pay equity legislation, and reporting. This scrutiny is pushing organizations to improve communication, awareness, and education about their internal compensation programs to ensure accountability and fairness.
