Normandin Beaudry reports rising job openings, slight reductions in salary budgets for key sectors
Normandin Beaudry has released the results of its pulse survey on salary increase budget forecasts for 2025.
Conducted in November 2024, the survey gathered responses from nearly 400 Canadian organizations to assess their initial salary budget projections made in summer 2024.
The findings show that the average salary increase budget for 2025 is aligned with initial forecasts at 3.3 percent, slightly lower than the summer estimate of 3.4 percent, excluding freezes.
Darcy Clark, senior principal, Compensation at Normandin Beaudry, noted that organizations are working to balance retaining top talent with managing compensation expenses to stay agile and competitive in a shifting geopolitical environment.
Clark stated, “While less aggressive than last year's 3.6 percent, it's important to note that the forecast for 2025 remains above historical norms and is outpacing current rates of inflation.”
The survey found that 68 percent of organizations made no changes to their initial summer budget forecasts. Among those revising projections, 65 percent reduced their budgets, citing cost reduction efforts as the primary reason.
Most industries reported minor reductions to their salary increase budgets. The most significant decreases occurred in electronic gaming and visual effects, transportation and warehousing, and telecommunications and data processing sectors.
These adjustments reflect recent compensation increases, cost-saving measures, and reduced pressure for talent in these industries.
In contrast, finance and insurance, public services, and pharmaceutical and biotechnology sectors reported increases in their initial salary increase budgets. These adjustments were attributed to competitive market conditions, retention needs, and internal equity considerations.
The survey shows that 42 percent of organizations plan to reserve an additional budget averaging 0.9 percent for 2025.
Clark stated, “By reserving these resources, organizations are positioning themselves to better address potential challenges during the next compensation cycle.”
He added that this approach allows companies to address internal inequalities through ad hoc salary adjustments. Clark also noted that allocating part of the budget supports salary increase differentiation for high performers and aids retention efforts for strategic or business-critical roles.
The average total salary increase budget for 2025 remains at 3.6 percent, slightly lower than the initial summer 2024 forecast of 3.7 percent, excluding freezes.
|
Ownership Structure |
Projected Budget Increase |
|---|---|
|
Not-for-profit organizations |
4% |
|
Privately held organizations |
4% |
|
Publicly traded organizations |
3% |
|
Government organizations/Crown corporations |
4% |
Source: Normandin Beaudry
As salary increase budgets stabilise to pre-pandemic levels, the survey indicates that organizations are prioritizing total rewards strategies.
58 percent of respondents aim to maintain competitive total rewards programs, while 57 percent are focusing on employee engagement and communication. Additionally, 32 percent are reviewing their job architectures and hierarchy.
Clark explained, “Prioritizing these areas can help organizations ensure that they are better supporting their employees, while boosting comprehension and appreciation of the programs that exist to support talent development and growth. This internal focus can help ensure they remain competitive and an employer of choice.”
