Navigating compensation trends: Insights for Canadian employers
Across Canada, compensation trends are evolving to meet changing expectations and priorities among workers. These trends reflect natural changes and progression in Canadian organizations, driven by evolved expectations and priorities of employees and employers alike. Adapting to these trends can help organizations attract and retain top talent while fostering a positive and inclusive workplace culture.
Canadian employers are often asking themselves:
How does our compensation program compare to competitors?
More employers are leveraging data analytics to make informed compensation decisions as well. This includes using market data to benchmark salaries and optimize compensation structures. Factoring in inflation, risk and fiscal responsibility makes the task even more nuanced.
Are we balancing external and internal equity fairly?
Setting a compensation structure that reduces turnover while allowing your organization to remain competitive requires a strategic approach informed by current and future trends, economic outlook, internal equity and much more.
Does our incentive plan design effectively link and reward performance to business objectives?
When paying annual bonuses, organizations must ensure that these amounts reflect the attainment of challenging business objectives. Annual payouts must translate into more than just business as usual.
How can organizations ensure the attraction and retention of employees using tools or programs different from base salaries?
These days, it takes much more than salary to retain top employees. New ways of working, including remote work and flex time, have prompted organizations to reconsider their compensation strategies. Companies are exploring location-based pay adjustments and offering remote work stipends or allowances to accommodate virtual work arrangements, for example.
Does our pay policy meet transparency and legal pay equity requirements?
At TELUS Health, our compensation consultants ensure to identify and analyze trends that inform and help direct employers toward a comprehensive and mutually beneficial compensation program. It’s important to partner with a compensation consultant with expertise in pay transparency, equity, compliance and more.
Compensation extends far beyond wages and base pay. Benefits, wellness programs, career development opportunities and more are part of the total rewards strategy that is shaping current compensation expectations and direction across Canada.
Here are four key trends to note
1. Transparency in compensation
Transparency is now a cornerstone of modern workplaces, especially in matters concerning compensation. Employees increasingly value openness regarding salary structures and how their pay is determined. Companies are becoming more open about compensation, performance-related pay and the decisions around them. Clear, forthright communication fosters trust and satisfaction among employees.
Posting precise salary ranges in job listings is becoming the new normal. Prince Edward Island, for instance, passed pay transparency legislation that has been in effect since 2022. This requires companies to disclose their pay scale in job postings. British Columbia has done the same with legislation that came into force in early 2023.
Employers are increasingly incorporating pay information into job postings because it enhances their ability to attract job seekers. In fact, 75 per cent of workers would be more likely to apply for a company with a pay transparency policy. It builds workplace trust, strengthening employees' sense of belonging to their employer. This recruitment advantage became especially significant during the tight labor market resulting from the pandemic. There appears to be a cultural shift among HR leaders who view pay transparency as a means to foster a fair and equitable workplace.
“When properly implemented, a pay transparency policy helps motivate and retain workers while making a company more attractive to future candidates. It demonstrates and reaffirms an organization's commitment to equity,” said Guylaine Béliveau, National Practice Leader at TELUS Health Compensation Consulting.
2. The evolution of employee needs
Many Canadian organizations are implementing performance-based pay structures. This includes variable compensation like bonuses, profit-sharing and stock options tied to individual or team performance metrics. Executive pay, for example, must strike the right balance in rewarding role responsibility that aligns with the strategic intent, organizational reality and industry. Leaders set the tone and organization direction; your pay structure should facilitate the same foresight.
While base pay has increased, Canadian workers are no longer solely focused on salary figures. They seek a comprehensive approach to compensation that encompasses various aspects of their wellbeing. This includes benefits like health insurance, wellness programs, flexible work arrangements and professional development opportunities.
Organizations increasingly view compensation as a tool to support employee wellbeing and are investing in additional benefits that enhance overall employee satisfaction and productivity. Compensation includes much more than base salary — it factors in total rewards like benefits, retirement and pension, paid time off and non-monetary benefits like wellness programs, flexible scheduling and career development opportunities. Adapting to these changing expectations is key to attracting and retaining top talent.
3. Benchmarking and survey data
Leveraging survey data and benchmarking is crucial in understanding compensation trends, and more organizations are referring to this data when developing their pay structures. Market data helps establish guidelines for fair pay, administer salary ranges that attract and retain top talent and help workplaces design cohesive packages that align salary with total rewards. The TELUS Health 2024 Salary Projection Survey shows that over 70 per cent of survey respondents rely on market data to adjust salary ranges.
TELUS Health conducts comprehensive surveys and industry benchmarks with a database of over 600 organizations to ensure competitive compensation packages. Survey types include the Canadian Salary Survey (with reporting by size, region and industry), and the Employer Benefits Survey. This data-driven approach helps identify market trends and allows for strategic adjustments to stay competitive in attracting talent.
Market comparison is very important, but so is internal equity, where employees who share similar skills, positions and experience are paid similarly. Data helps organizations balance the market with their internal equity.
4. The rise in partnerships
Your employees are the driving force behind achieving business goals. Partnering with compensation consultants who can advise and provide custom assistance will help you create a culture that values and equally rewards your team. An experienced partner also ensures your compensation policy considers the different influencers, such as pay equity legislation, governance, organizational mission and values and more.
Trust TELUS Health as your compensation consulting partner
As compensation trends evolve, TELUS Health remains committed to prioritizing transparency, holistic compensation approaches and leveraging data-driven insights. By understanding and adapting to changing workforce expectations, TELUS Health continues to set benchmarks for compensation excellence in the Canadian market.
Our compensation consulting practice partners with you to implement the most strategic compensation policy. This partnership provides you with innovative solutions and insights, ensuring your organization remains agile in responding to evolving workforce needs.
We are trusted advisors who partner with Canadian clients to cultivate employee engagement and deliver total rewards solutions aligned to their specific business strategies. Address today's needs with tomorrow's vision in mind. Contact us today to learn more about how we can support your organization.