A new survey by Ontario-based consultancy firm Normandin Beaudry has revealed that the average salary rate in Canada is expected to trend downward in 2025, driven by budget cuts and limited intent among employers to increase compensation.
The survey highlights that 65% of companies across Canada have no plans to increase their average salary rates due to budgetary constraints. Moreover, only 3.6% of Canadian companies intend to implement salary hikes in 2025, a slight dip from the 3.7% increase projected by Normandin Beaudry last summer.
“Organizations are trying to find the right balance between retaining top talent while managing their compensation spend to remain agile and competitive amid an evolving and uncertain geopolitical landscape,” said Darcy Clark, Senior Principal, Compensation at Normandin Beaudry.
Despite the stagnancy, Clark noted that the 2025 salary forecast is, on average, still outpacing the current inflation rate, providing some relief for workers.
Several industries are seeing significant salary stagnation or reduction, including:
- Electronic gaming and visual effects
- Transportation and warehousing
- Telecommunications
- Data processing and warehousing
On the other hand, some sectors are likely to buck the trend, with modest salary growth anticipated in:
- Finance and insurance
- Public services
- Pharmaceutical
- Biotechnology industries
The survey also breaks down salary projections by ownership structures, with certain types of organizations expected to outperform the national average:
- Not-for-profit organizations: 4.1% increase
- Privately owned companies: 3.9% increase
- Publicly traded companies: 3.4% increase
- Government/Crown corporations: 3.6% increase
As salary stagnation persists, businesses will need to develop innovative retention strategies beyond cash compensation to maintain employee satisfaction. Normandin Beaudry emphasized the importance of non-monetary incentives and workplace improvements to attract and retain top talent.
With Canada’s salary landscape facing pressure, employers across industries will need to strike a delicate balance between fiscal prudence and employee retention to remain competitive in 2025.