Fewer salary freezes expected this year than last year

Fewer salary freezes expected this year than last year

Salary freezes within companies or other organizations should be less widespread this year than in 2020, according to the firm Normandin Beaudry, specializing in compensation.

One in five organizations in Canada thought in July that they should freeze salaries for 2020, but they were only 7% last November to plan to repeat the experience this year, a sign of an anticipated economic recovery.

Despite the encouraging news, the fact remains that this figure is much higher than in a normal, or pre-pandemic period, when the percentage of organizations that planned a salary freeze hovered around 3%.

These figures come from a survey carried out in November among 300 organizations, which was released Monday by the firm Normandin Beaudry.

It is in Ontario that organizations have shown more caution, or mistrust, as 10% of organizations surveyed expect a salary freeze this year.

The manufacturing sector, as illustrated by Normandin Beaudry, is particularly optimistic: last summer, 10% of the organizations surveyed in this sector had implemented a salary freeze for 2020. In November, the trend was entirely overthrown, and no organization expected to freeze employee salaries in 2021.

“This finding seems to demonstrate the return to a certain confidence in the economic outlook and the desire of organizations to remain competitive in their market without losing sight of the scarcity of talent,” commented the firm in the press release accompanying its analysis.

The picture is not the same for all organizations. The size of a business has a direct bearing on salary forecasts. The trend even points to a dynamic opposite to the general trend.

On this point, the figures speak for themselves: for organizations with 50 to 100 employees, they are 16% to foresee salary freezes for the coming year, while they were only 4% to freeze. salaries in 2020. On the side of organizations with less than 50 employees, 30% expect a freeze for 2021, almost double that of last summer, while 16% of organizations had carried out a salary freeze.

“In summary, for smaller organizations, the trend is the opposite [à la tendance générale de ne pas geler les salaires]. Since these organizations represent only 20% of the sample, their reverse trend does not reverse the general trend, ”explained Marie Anik Aussant, Director of Marketing and Communications at Normandin Beaudry.

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