Quebecers will probably receive a smaller salary increase in 2024 in a context of economic slowdown and moderation of inflation.
Employers plan to grant, on average, salary increases of around 3.7% in 2024, according to the updated report on 2024 salary forecasts from the Order of Certified Human Resources Advisors (CHRA).
In recent years, the order had adjusted its forecast upwards when updating, but the organization’s forecast remained unchanged after six months. Its general director, Manon Poirier, sees this as a sign of stabilization.
“If I compare to the last two years, I think that the power of the employee has perhaps diminished a little,” notes the interview expert. Would we be prepared to affirm that the power has returned to the employers? Not yet.”
After an intense period of hiring, the technology sector and the banking industry have made layoffs. “But it didn’t really affect the unemployment rate. What that tells us is that the market is picking up these people. There are still 150,000 vacant positions in Quebec.”
Still above inflation
Employers appear to be taking a cautious approach with their human resources while a deterioration in the economy or a return to labor scarcity are two plausible scenarios.
Now that inflation seems on the verge of being brought under control, “Quebec workers should start preparing for increases that could be smaller than those received in recent years,” warns Mme Poirier.
However, she emphasizes that a rate of 3.7% is already higher than the most recent inflation data. The consumer price index increased at a rate of 2.8% in February, down from 2.9% in January, according to Statistics Canada. “It allows us to keep our purchasing power,” judges Mme Poirier.
On average, organizations awarded raises below the cost of living in 2021, 2022 and 2023, according to data in the CHRA report.
During the 2010s, however, increases were above inflation almost every year. 2020 also saw average increases of 7.8%, while inflation was just 0.8% during the initial shock of the pandemic. “For years, workers received more than inflation.”
Less gap between sectors
The gap between different sectors has also narrowed. There is thus only 0.7 percentage point between the industries forecasting the highest and lowest increases. This is a contrast to last year’s differences. “Usually we see larger differences,” says Manon Poirier.
The technology sector and banks have moderated their enthusiasm. Conversely, a sector at the back of the pack like retail issues forecasts more in line with the averages, underlines the expert.
The Order of approved human resources advisors points out that its exercise remains a forecast. In 2023, compensation firms anticipated increases of 4.1% in 2023. Weekly compensation, including overtime, actually increased by 3.7%, according to Statistics Canada data.
For her part, Anna Potvin, partner and head of the compensation practice at Normandin Beaudry, believes that the 2024 forecasts could be higher than what will actually be paid this year.
“I expect that the reality will be slightly below what we see this morning,” she analyzes during a presentation organized by the Order for human resources professionals. There is still a certain caution in the context [économique]. Remuneration is a recurring expense from the moment we inject an expense into payroll, it is there on a recurring basis.”
With the demographic reality, Marc Chartrand, senior advisor for total compensation at Gallagher, judges that employers will once again be faced with a labor shortage once the economic slowdown has passed.
“I think we are a year away, maybe 18 months, not necessarily from returning exactly to where we were, but in a similar situation,” he says during the same presentation.