This year’s Compensation Planning Outlook is based on responses from 401 organizations with operations in Canada. This issue briefing summarizes the results of our annual compensation survey and forecast.
Compensation Planning Outlook 2021
Compensation Planning Outlook 2021
People and Culture
$1,295.00
- As COVID-19 spread throughout the world, many countries mandated lockdowns to slow the transmission of the disease—grinding economic activity around the globe to a halt. That narrative played out here in Canada where real GDP in 2020 is forecast to drop by 6.6 per cent.
- As the economy starts to recover, organizations are planning to moderate their salary increases for next year. The average pay increase for non-unionized employees is forecast to be 2.1 per cent in 2021—keeping pace with the predicted 2.1 per cent inflation rate.
- Canadian employers are showing marked restraint in planning 2021 salary budgets. More than a third (40 per cent) of organizations do not yet have preliminary budget recommendations. Of those that do, 14 per cent are planning a freeze across all employee groups.
- Unionized wage increases negotiated for 2020 also took a hit, landing at 1.7 per cent, compared with 1.9 per cent last year. Looking to 2021, negotiated wage increases are expected to land at 1.6 per cent.
- Short-term incentives did not pay out as planned in 2020, falling short across all employee groups for one-quarter of organizations. Short-term incentive pay cost an average of 10.3 per cent as a percentage of total base pay spending in 2020, down from the 11.3 per cent that was planned. Employers have adjusted target spending and are now planning for 10.1 per cent of base pay spending for 2021.
- Continued uncertainty will put downward pressure on pay in 2021. Any deviation in pay increase projections is likely to be in the form of downward revisions.
Customers Who Downloaded This Also Liked
18 min read
24 min read
7 min read
Require an accessible version of this research?
Upon request, Signal49 Research offers accessible versions of research. Please contact us to request your accessible version.
Learn more about our accessibility policies.
Effective January 26, 2026, AERIC Inc./Signal49 Research discontinued use of ‘The Conference Board of Canada’ name, logo and branding, which had been used by AERIC Inc./Signal49 Research under license from The Conference Board, Inc. The Conference Board, Inc. and its licensees, which are not affiliated with Signal49 Research, own all right, title and interest in THE CONFERENCE BOARD name and trademarks in Canada and have the exclusive right to their use in Canada since January 26, 2026.
