Manny Campione, Principal and Market Leader, Compensation and Performance, Normandin Beaudry
Clara Pochard, Associate Consultant, Compensation, Normandin Beaudry
Canada’s unemployment rate hit a new record low of 4.9% in June 2022, exacerbating the labour shortage headwinds facing Canadian employers, an issue that looks like it’s here to stay.
Preliminary results from Normandin Beaudry’s 2023 Salary Increase Survey indicate that the average salary increase budget is expected to reach 3.9% across Canada, excluding salary freezes. One third of participating organizations also plan to add an extra budget to close market gaps and retain key staff and high-performing employees. Additionally, respondents confirmed that actual increases granted in 2022 surpassed the average budgeted estimate of 3.4%, coming in at 3.7% nationally—well above the 10-year Canadian average.
Concurrently, a recent LinkedIn poll conducted by Normandin Beaudry revealed that salaries ranked third among the reasons employees cited when making the decision to stay with their current job or change employers.
So, what makes an employee stay? And how can companies attract top performers, aside from their paycheque? What drives employees to leave? What’s a good offer? Turns out, it’s more than just about money.
Among the reasons cited to remain loyal to one’s employer, flexibility ranks as a top priority. Working from home became widespread during the pandemic, and while challenging at first, remote work is now highly valued by employees. This prompted many organizations to create or update their work-from-home policy.
As a result, no less than 75% of participating organizations are now offering a hybrid work model. However, companies can really stand out by the choices they offer employees, such as the number of required in-office days or by allowing employees to work completely away from the office, or even abroad.
Beyond remote work, organizations can also provide greater flexibility by offering reduced or compressed schedules, thereby allowing employees to achieve a desired work-life balance. Such arrangements not only encourage employees nearing retirement to stay but might also prompt those who’ve already left the company to return.
Flexibility can take on many forms, in all areas of a total rewards package, and it remains the key driver when attracting and retaining employees. Some employers, for example, are offering employees the opportunity to purchase vacation time and granting additional leave, both paid and unpaid.
Preliminary results from Normandin Beaudry’s 2023 Salary Increase Survey indicate that the average salary increase budget is expected to reach 3.9% across Canada, excluding salary freezes.
Employees also are looking for clearer professional development and progression opportunities, and a career framework (also known as career pathing) is another ace in the hole that organizations can use to retain top talent. To maintain a competitive edge, companies use a highly personalized approach whereby managers engage with their employees to identify their expectations and offer a clear career path in line with their aspirations. To do this, one needs a workplace environment that encourages open and free dialogue between management and its employees.
The survey showed that workplace climate ranks fourth among employee engagement. Respondents said that they appreciate a positive workplace environment with caring managers and friendly and competent colleagues. Involving different teams in the recruiting process is a good way to maintain and share a strong company culture and allows HR to rely on ambassadors to convey real-life messages on the employee experience.
Next Steps: Total Rewards
It’s easy for companies to get caught-up in The Great Raise, especially when trying to retain or attract talent, so it is critical for organizations to sit down and make an inventory of the different components of their total rewards packages before even thinking about overhauling their offering.
To better understand the relative importance of each total rewards component, employers should survey their employees to comprehend their hopes and manage their expectations. Authentic engagement is critical when building a successful total rewards package.
Finally, communication plays a key role in the appreciation of total rewards by employees. Promoting total rewards and the company brand should be at the core of every single employee engagement effort. When an offer is properly explained and understood, its perceived value increases.
It’s the overall package that will continue to attract and retain talent. Keeping the discussion focused on the dollars and sense, as opposed to dollars and cents, will help build the company and set it on the path of success.