Welcome, Canada, to The PayScale Index!
By Bridget Quigg, PayScale.com Last week, PayScale released the most recent results for The PayScale Index, covering Q2 of 2011. And, for the first time ever, The PayScale Index included information about Canadian national pay trends. Guess what? Wages in Canada are growing overall, unlike the US where wages are flat, nationally. Canadian employers, you’d better be have a plan to benchmark positions against current data and work to retain your top performers. Your labor market is heating up.
What’s Happening Up North?
According to PayScale’s recent review of Canadian national pay trends, private workers in Canada saw less of a wage drop than the US during 2008 and 2009, the lowest point in the global recession, and are now seeing earnings increases across-the-board that outpace those for US workers.
So far, The PayScale Index is only publishing national average compensation trends for Canada. In the future, coverage of Canada will include more specific metrics, like by city or by industry.
“We are starting with a national view. And, as we are confident we have the right amount and type of data, we’ll drill down to closer looks at major cities and common industries,” says Al Lee, PayScale’s director of quantitative analysis and the lead on the study.
What Is The PayScale Index?
The PayScale Index tracks quarterly compensation trends, specifically changes in total cash compensation for full-time, private industry employees. The PayScale Index has not been adjusted for inflation and is based on actual wages. For example, it includes bonuses but excludes non-cash benefits or equity (stock), focusing only on cash earnings.
What Does this Wage Data Teach Us?
Canadian employers must be prepared to compete for talent. It is easy to think that you can freeze or minimally raise your employees’ wages due to economic hard times, but this approach may no longer be realistic in Canada. Canadian employers would be wise to get busy comparing their salary data to the market, benchmarking each position and preparing for growth in labor costs.
What Can the US Learn?
Canada is doing something right. Their banks made more conservative choices and the country was able to weather the global recession much better than the US.
During the recession, US workers suffered wages dropping, on average nationally, nearly a percent and a half, between 2008 and 2009. And, wages have recovered very little in the 50 states, leaving them, roughly, where they were in the beginning of 2008.
By comparison, Canadian workers’ earnings fell one percent between late 2008 and early 2010, and then quickly went charging upwards, rising above their peak in 2008 and continuing up through 2011.
Al Lee says, “What comes next for Canadian wages? Who knows, but the trend is looking like a fairly swift recovery from a typical recession.” Lee noted that the balance between available labor and demand will continue to shift, hopefully for the best for Canadian workers.
Lee’s final thought: “Perhaps Canadian companies are less greedy and more willing to share rising profits with their workers than US employers are.”
Someone else will need to do that study. For now, check out The PayScale Index (Canada).
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