Update 2021 salary forecast survey - Optimism despite the ongoing challenges
Analysis
Over the month of December 2020, PCI-Perrault Consulting (PCI) updated some sections of its 2021 Salary Forecast Report. This pandemic year-end update allowed us to confirm organizations’ intentions regarding their 2021 salary increase budgets, but also to get a better understanding of the COVID-19 pandemic impacts on their variable compensation plans.
The updated report presents data from 140 organizations in various sectors with a broad range of income. All participating organizations operate in Quebec and 38% of them also have operations elsewhere in Canada.
Optimism despite the ongoing challenges
Among the organizations PCI surveyed, only 4% plan to freeze salaries, both across Québec and Canada. Prior to this update, the intentions were 7% in Québec and 5% in Canada.
- Among the organizations having additional discretionary salary budget in order to recognize special cases, the only noticeable change concerns organizations with revenues greater than $ 1 billion which have significantly reduced their budget.
- The optimism of surveyed organizations can also be seen in the budgeted salary structure adjustments. 16% of organizations in Quebec and 13% of organizations in the rest of Canada plan to freeze their salary structure, compared to 25% and 21% in the fall survey.
- 28% of surveyed organizations confirmed having made changes to their variable compensation program due to the pandemic.
- While the changes increased the bonus paid in 31% of cases, they also had the opposite effect in 17% of cases.
Salary adjustments for non-unionized employees
Pay increase budgets (excluding freezes) projected for 2021 are 2.5% for 2021 in both Québec and Canada.
In 2021, 4% of organizations plan to freeze employee salaries.
Average salary increase budgets (excluding freezes) are as follows:
|
Region |
Nb Org. |
% org. Freeze |
Projected 2021 |
|||
|
P25 |
P50 |
P75 |
Average |
|||
|
|
|
|
|
|
|
|
|
Québec |
138 |
4% |
2.0% |
2.5% |
2.9% |
2.5% |
|
Rest of Canada |
53 |
4% |
2.0% |
2.5% |
2.7% |
2.3% |
|
|
|
|
|
|
|
|
|
Canadian Revenues |
Nb Org. |
% org. Freeze |
Projected 2021 |
|||
|
(or annual operating budget) |
P25 |
P50 |
P75 |
Average |
||
|
|
|
|
|
|
|
|
|
Less than $50M |
67 |
7% |
2.0% |
2.5% |
3.0% |
2.5% |
|
$50M to less than $100M |
20 |
0% |
2.1% |
2.5% |
2.7% |
2.5% |
|
$100M to less than $500M |
24 |
4% |
2.0% |
2.5% |
2.5% |
2.2% |
|
$500M to less than $1B |
9 |
0% |
2.0% |
2.5% |
3.0% |
2.5% |
|
1$B to less than $2B |
18 |
0% |
2.4% |
2.5% |
2.8% |
2.5% |
|
|
|
|
|
|
|
|
|
Industry Sector |
Nb Org. |
% org. Freeze |
Projected 2021 |
|||
|
P25 |
P50 |
P75 |
Average |
|||
|
|
|
|
|
|
|
|
|
Agriculture, farming / Agrifood industry |
9 |
0% |
2.5% |
2.5% |
2.8% |
2.6% |
|
Associations and Professional orders / Foundations |
8 |
13% |
2.5% |
2.5% |
2.5% |
2.6% |
|
Culture and leisure / Lodging & Restaurants |
7 |
0% |
2.0% |
2.5% |
2.5% |
2.3% |
|
Distribution / Retail and wholesale |
9 |
0% |
1.5% |
2.5% |
2.5% |
2.1% |
|
Energy / Materials / Mining / Natural Resources |
8 |
0% |
2.5% |
2.6% |
2.7% |
2.7% |
|
Industrial Products / Construction / Manufacturing |
30 |
0% |
2.0% |
2.0% |
2.5% |
2.2% |
|
Finance and Insurance / Real Estate |
15 |
0% |
2.2% |
2.5% |
3.0% |
2.6% |
|
Local Governments / Public and Parapublic Services / University / Research |
10 |
10% |
2.0% |
2.5% |
2.8% |
2.4% |
|
Information Technologies / Telecommunications / Medias / Communications |
12 |
17% |
2.5% |
2.9% |
3.0% |
2.7% |
|
Health / Pharmaceutical |
9 |
0% |
2.0% |
2.5% |
3.0% |
2.5% |
|
Professional, Scientific, Technical, Administrative and Management Services / Business Services |
13 |
15% |
1.8% |
2.5% |
3.3% |
2.5% |
|
Transportation, logistics and warehousing |
8 |
0% |
2.0% |
2.3% |
2.9% |
2.6% |
|
|
|
|
|
|
|
|
Salary structure adjustments
In 2021, 16% of organizations in Quebec and 13% of organizations in the rest of Canada plan to freeze their structure.
|
Region |
Nb Org. |
% org. Freeze |
Projected 2021 |
|||
|
P25 |
P50 |
P75 |
Average |
|||
|
|
|
|
|
|
|
|
|
Québec |
111 |
16% |
1.8% |
2.0% |
2.3% |
2.0% |
|
Rest of Canada |
45 |
13% |
1.5% |
2.0% |
2.0% |
2.0% |
|
|
|
|
|
|
|
|
|
Canadian Revenues |
Nb Org. |
% org. Freeze |
Projected 2021 |
|||
|
(or annual operating budget) |
P25 |
P50 |
P75 |
Average |
||
|
|
|
|
|
|
|
|
|
Less than $50M |
49 |
16% |
2.0% |
2.0% |
2.5% |
2.3% |
|
$50M to less than $100M |
16 |
13% |
1.6% |
2.0% |
2.4% |
1.9% |
|
$100M to less than $500M |
20 |
15% |
1.5% |
1.8% |
2.0% |
1.8% |
|
$500M to less than $1B |
9 |
22% |
1.8% |
2.0% |
2.0% |
1.9% |
|
1$B to less than $2B |
17 |
18% |
1.8% |
2.0% |
2.0% |
1.8% |
|
|
|
|
|
|
|
|
|
Industry Sector |
Nb Org. |
% org. Freeze |
Projected 2021 |
|||
|
P25 |
P50 |
P75 |
Average |
|||
|
|
|
|
|
|
|
|
|
Agriculture, farming / Agrifood industry |
97 |
0% |
1.9% |
2.0% |
2.3% |
2.1% |
|
Associations and Professional orders / Foundations |
8 |
13% |
2.0% |
2.5% |
2.5% |
2.2% |
|
Culture and leisure / Lodging & Restaurants |
6 |
0% |
1.9% |
2.3% |
2.5% |
2.2% |
|
Distribution / Retail and wholesale |
96 |
17% |
1.5% |
1.5% |
1.8% |
1.8% |
|
Energy / Materials / Mining / Natural Resources |
87 |
14% |
2.0% |
2.0% |
2.4% |
2.0% |
|
Industrial Products / Construction / Manufacturing |
23 |
17% |
1.5% |
2.0% |
2.2% |
2.0% |
|
Finance and Insurance / Real Estate |
13 |
8% |
1.9% |
2.0% |
2.1% |
2.2% |
|
Local Governments / Public and Parapublic Services / University / Research |
9 |
22% |
2.0% |
2.0% |
2.3% |
2.1% |
|
Information Technologies / Telecommunications / Medias / Communications |
11 |
27% |
2.0% |
2.0% |
2.1% |
2.2% |
|
Health / Pharmaceutical |
7 |
14% |
1.5% |
1.9% |
2.0% |
2.0% |
|
Professional, Scientific, Technical, Administrative and Management Services / Business Services |
9 |
33% |
1.6% |
2.0% |
2.0% |
2.1% |
|
Transportation, logistics and warehousing |
5 |
20% |
1.5% |
1.8% |
2.0% |
1.7% |
|
|
|
|
|
|
|
|
45% of surveyed organizations have an additional budget for rewarding non‑unionized employees in particular cases (employees with high potential, employees who show exponential growth, employees in jobs with a shortage of workers, etc.). The additional projected budget for these organizations for 2021 is 1.7%.
Additional salary increases budget
The total salary increases budget (annual budget + additional budget) for 2021 among organizations having an additional budget is expected to be 4.3% on average.
Variable compensation plan
Most organizations that responded to our survey (78%) have a variable compensation plan. 39% of them made changes to their plan in 2020 because of the pandemic. Changes had the following impact on the bonus target:
| Level of payment |
% of org. |
| Above the target |
31% |
| On or near target |
52% |
|
Below the target |
17% |
The nature of the changes made to the programs varies widely:
Among the same organizations, the level of payment for the year 2020 is in line with fall survey results. Including the changes to the program the level of payments were:
|
Level of payment |
% of org. |
| No bonus |
16% |
| Below target |
24% |
| On or near target |
50% |
| Above target |
10% |
If you have any questions about our report, contact:
Evelyne Gaudreau, Consultant
514-788-4747, ext. 227
egaudreau@perraultconseil.com