Quebec employers plan to grant salary increases of 2.6% to 3.8% next year, according to the Conseil du patronat du Québec (CPQ), which is holding its annual conference on 2025 salary forecasts this Friday. Last year, employers were counting on increases ranging from 3.6% to 4.1%.
“We are getting closer to what employers were used to agreeing to as salary increases before the pandemic,” explains Norma Kozhaya, vice-president of research and chief economist at the CPQ, in a press release. “We are returning to a certain normality, although the labour shortage continues to represent a real challenge.”
To estimate these increases, the CPQ, which represents more than 70,000 employers, consulted various compensation firms. The latter surveyed hundreds of employers across the country. It emerged that the salary increases expected in 2025 should be between 2.6% and 3.8%, excluding salary freezes. In this regard, we learned that 7% of the organizations surveyed plan to freeze salaries next year. “This could mean that organizations feel less pressure to attract and retain employees, or that they believe that their structure is sufficiently competitive,” notes the Gallagher firm.
Organizations are placing increasing importance on salary transparency, Gallagher continues. Many employers surveyed “want to publish salary scales (26%) or want to have an open discussion about where employees fit within their scale (29%).” […] It becomes all the more essential to equip managers with the skills to independently and effectively explain to employees the “why” and “how” of compensation programs.
Across Canada, the highest projected wage increases are in construction (4.13%), real estate (3.92%) and management of companies and enterprises (3.9%), Telus Health estimates. At the other end of the spectrum are public administration (2.75%), health care and social assistance (2.92%) and educational services (2.93%).
Attracting and retaining workforce
Employer budgets to fund pay increases are expected to be slightly lower in 2025 than in 2024, according to Mercer. Still, some organizations are expecting to loosen their purse strings next year: “The challenges for organizations with more generous pay increase budgets than last year continue to be attraction, retention and inflation.”
A significant proportion of employers (42%) plan to use non-financial measures, such as career development programs, to retain and attract employees, Gallagher reveals. “These data show that organizations are using creativity to remain attractive to their employees. Salary is one of them, but it is not the only incentive at their disposal,” adds Karl Blackburn, president and CEO of the CPQ, in a press release.
The data collected by the CDP is similar to that published Tuesday by the Ordre des conseillers en ressources humaines agréés. The organization, which brings together 12,000 professionals, predicts that employers in the province will grant average salary increases of 3.3% in 2025.
“We sense a lot of caution within organizations,” Manon Poirier, the Order’s director general, said in writing. “On the one hand, they want a return to normal and to levels of increases closer to their ability to pay. On the other hand, they are facing retention challenges and are carefully monitoring their positioning in relation to the rest of the market.”