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Workers in the West and in major U.S. cities enjoying better wage gains, global survey finds
September 07, 2007
Michael Babad
Business reporter
Average pay increases among employers in the Greater Toronto Area are lagging salary and wage hikes in many major Canadian and U.S. cities this year, and the same disparity is expected again in 2008, a survey released yesterday shows.
Notable in the study by Hewitt Associates is the gap between average increases in the GTA, as well as Montreal, and those in the West.
It's not that Toronto employers are miserly – average base salary increases in the GTA were still at 3.3 per cent this year – but tight labour and housing markets are pushing up pay packages in western centres such as Calgary and Vancouver.
"Out west, the labour shortage and the housing costs are what's largely driving increases," said Keri Humber, senior consultant at Hewitt.
"In Toronto, organizations are still giving meaningful increases because they're still higher than the inflation rate."
The inflation rate is about 2.2 per cent, according to the latest figures from Statistics Canada.
Local employers are being more cautious with costs but still looking at incentives other than money, such as benefits, retirement plans and flexible work arrangements, he said.
The Hewitt survey of 314 Canadian employers in June and July, part of a global study, looked at company budgets for general salary and merit pay increases. So, for example, the 3.3 per cent figure for the GTA represents the average increase in the budgets of those employers surveyed.
More than 100 organizations in the GTA were included.
The survey by Hewitt, a global human resources services company, showed the average increase in the GTA compared to 5.3 per cent in Calgary, 3.7 per cent in Vancouver and 3.4 per cent in Montreal.
Next year, a projected average 3.4 per cent increase in the GTA would compare to 5.2 per cent in Calgary, 3.7 per cent in Vancouver and 3.5 per cent in Montreal.
Among U.S. cities, Hewitt found as part of its global study, average increases in New York were 3.8 per cent this year and are projected at 3.9 per cent in 2008.
Houston was pegged at 4.5 per cent and 4.6 per cent, and Atlanta at 3.6 per cent in both years. Detroit, the hub of the auto industry, was at a lower range, 3.2 per cent and 3.4 per cent.
In both Canada and the United States, government centres are doing well, with average 2007 increases of 4 per cent in Ottawa and 4.7 per cent in Washington. Next year, projected increases are 3.9 per cent in Ottawa and 4.9 per cent in Washington.
In Calgary, whose growth is being driven by the oil industry, increased demand for labour is attracting workers from outside the province, fuelling a housing shortage.
"The oil companies have a lot of money, and they pay what they have to pay," Humber said.
Statistics Canada's latest reading put Ontario's unemployment rate at 6.6 per cent in July, compared to 3.3 per cent in Alberta and 4.1 per cent in British Columbia.
Hewitt's survey found average increases across all industries in 2007 ranged from 3.2 per cent for unionized workers to 4.1 per cent for executives, and are projected in 2008 at 3.1 per cent and 4 per cent, respectively.
The biggest increases are expected in the oil and gas industry, government, construction/engineering and aerospace, with the auto industry, hospitality/restaurants, printing and forestry products in the lower range.
While Humber could not address this, a question for Bay Street will be how the volatility in financial markets might affect bonuses.
Some observers expect the number of lucrative takeover deals to slow because of the troubles that began with the mess in U.S. subprime mortgages and spread to other credit markets. Indeed, some Bay Street deals have already been put on hold, although players in the mergers and acquisitions area are watching to see how the next few weeks play out.
In a recent report, BMO Capital Markets senior economists Robert Hogue and Kenrick Jordan cited investment banking as one of the areas at risk in a prolonged crunch. And a hit to bonuses could be a first-round impact, Hogue said in an interview this week.
"If things were to deteriorate, that could be the first line of casualties."
http://www.thestar.com/Business/article/254071
September 07, 2007
Michael Babad
Business reporter
Average pay increases among employers in the Greater Toronto Area are lagging salary and wage hikes in many major Canadian and U.S. cities this year, and the same disparity is expected again in 2008, a survey released yesterday shows.
Notable in the study by Hewitt Associates is the gap between average increases in the GTA, as well as Montreal, and those in the West.
It's not that Toronto employers are miserly – average base salary increases in the GTA were still at 3.3 per cent this year – but tight labour and housing markets are pushing up pay packages in western centres such as Calgary and Vancouver.
"Out west, the labour shortage and the housing costs are what's largely driving increases," said Keri Humber, senior consultant at Hewitt.
"In Toronto, organizations are still giving meaningful increases because they're still higher than the inflation rate."
The inflation rate is about 2.2 per cent, according to the latest figures from Statistics Canada.
Local employers are being more cautious with costs but still looking at incentives other than money, such as benefits, retirement plans and flexible work arrangements, he said.
The Hewitt survey of 314 Canadian employers in June and July, part of a global study, looked at company budgets for general salary and merit pay increases. So, for example, the 3.3 per cent figure for the GTA represents the average increase in the budgets of those employers surveyed.
More than 100 organizations in the GTA were included.
The survey by Hewitt, a global human resources services company, showed the average increase in the GTA compared to 5.3 per cent in Calgary, 3.7 per cent in Vancouver and 3.4 per cent in Montreal.
Next year, a projected average 3.4 per cent increase in the GTA would compare to 5.2 per cent in Calgary, 3.7 per cent in Vancouver and 3.5 per cent in Montreal.
Among U.S. cities, Hewitt found as part of its global study, average increases in New York were 3.8 per cent this year and are projected at 3.9 per cent in 2008.
Houston was pegged at 4.5 per cent and 4.6 per cent, and Atlanta at 3.6 per cent in both years. Detroit, the hub of the auto industry, was at a lower range, 3.2 per cent and 3.4 per cent.
In both Canada and the United States, government centres are doing well, with average 2007 increases of 4 per cent in Ottawa and 4.7 per cent in Washington. Next year, projected increases are 3.9 per cent in Ottawa and 4.9 per cent in Washington.
In Calgary, whose growth is being driven by the oil industry, increased demand for labour is attracting workers from outside the province, fuelling a housing shortage.
"The oil companies have a lot of money, and they pay what they have to pay," Humber said.
Statistics Canada's latest reading put Ontario's unemployment rate at 6.6 per cent in July, compared to 3.3 per cent in Alberta and 4.1 per cent in British Columbia.
Hewitt's survey found average increases across all industries in 2007 ranged from 3.2 per cent for unionized workers to 4.1 per cent for executives, and are projected in 2008 at 3.1 per cent and 4 per cent, respectively.
The biggest increases are expected in the oil and gas industry, government, construction/engineering and aerospace, with the auto industry, hospitality/restaurants, printing and forestry products in the lower range.
While Humber could not address this, a question for Bay Street will be how the volatility in financial markets might affect bonuses.
Some observers expect the number of lucrative takeover deals to slow because of the troubles that began with the mess in U.S. subprime mortgages and spread to other credit markets. Indeed, some Bay Street deals have already been put on hold, although players in the mergers and acquisitions area are watching to see how the next few weeks play out.
In a recent report, BMO Capital Markets senior economists Robert Hogue and Kenrick Jordan cited investment banking as one of the areas at risk in a prolonged crunch. And a hit to bonuses could be a first-round impact, Hogue said in an interview this week.
"If things were to deteriorate, that could be the first line of casualties."
http://www.thestar.com/Business/article/254071
