Salary Increases for 2013

For many employees and employers, the end of year signals salary increases and budget preparation. As a service provider for companies all over North America, we know we’re going to be asked, “What are the projections for 2013?”

Sure – we could keep it to ourselves. But what’s the fun in that?  Here are the latest stats, taken from numerous reports including cullpepper.com, Mercer, Wynford, Payscale.com and the Canadian Conference Board.

According to all the surveys, the “3% raise” is the new normal.  This means if you are meeting expectations, you could receive anywhere between 2.5% to 3.5% and if you are exceeding expectations you may receive a bit more.  Most companies have a pool of money and the manager determines how the pool is spread out.  If you’re not meeting expectations, you might expect about 1.8% (which is inflation/cost of living in Canada) or nothing at all. Most annual increases (unless you are in a union or have a written guarantee) are merit increases – which means if you’re not performing, you shouldn’t get an increase (and let’s be honest, you’re probably lucky to still have a job).

According to The Conference Board of Canada, who surveyed 391 medium and large sized companies, the following salary trends are expected for 2013:

Smallest increases will take place in Ontario                                      2.7%

Toronto is expected to see increases averaging                               3.4%

Largest increases are expected in the oil and gas industry              4.3%

Edmonton is expected to see increases averaging                            3.9%

Calgary is expected to see increases averaging                               4.1%

COLA (Cost of Living Allowance)                                                      1.8%

Mercer is projecting a slim base-pay raise for 2013 in the US as the US labor market continues its slow recovery.  On average, firms expect to raise base pay by 2.9% in 2013 across the US as compared with 2.7% in 2012 and 2011 and 2.3% in 2010.  Inflation is projected to be 2%.

A major change, according to Mercer, from 2012 to 2013 in the US is that in 2012 there was a greater emphasis on variable pay. This year’s survey reported less variable pay so that more money could be put into base salaries to retain employees.  Mercer believes this is due to the fact that variable pay programs have not paid as well as expected and many employees are leaving rather than staying to collect on a small bonus. The base pay increase is a means to retain employees and compete within the industry.

Oh one other thing – those in the IT Industry are expecting to see about 7.5% in increases this year. If I could go back in time, I would tell myself to be a software developer even though I hate computers, don’t understand code at all and I really suck at math. The salary, the perks and being on the edge of something awesome every day would be worth it…I think!

2 comments

  • Paul says:

    Hi
    I was wondering what the cost of living is in Nova Scotia over the last couple of years we have got between 1.5 – 2 %, I have heard that it was over 3%, I work for a major food industry in Nova Scotia.

    I would like to have an answer for this question.

    What is the COLA for NS?

    • Michelle Berg says:

      COLA is an interesting thing. We typically go with Stats Can and the information that is used for the pension plans in each province. Accordingly, this year there was no COLA. Here is the info from the teacher’s pension plan, whom obviously have a BIG vested interested in COLA. http://www.novascotiapension.ca/teachersplan/pensioners/costlivingadjustmentcpiminus1

      That said, I often encourage employees not to think about COLA. Instead, unless you are in a union, you are looking at a merit increase. What do you bring to the table this year that is different than last year? Make that argument. In general, while most companies don’t think of it as super black and white, they are looking for a return of at least 3 X your base. If you are looking for a 3% increase, you need to be able to prove that you are 9% better than you were last year. It’s hard to do of course, as salary is so subjective. You also need to look at are you at least paid in the 50th percentile, given your education and experience? If you are then it also becomes a challenge to get a raise and you need to do something else to raise the bar. (Companies target the 50th percentile, because they neither want to lead or lag the industry…it just doesn’t make sense from a competition perspective most of the time).

      Hope that helps!

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