Many employers forced to adjust salary increases for next year
Were you planning for a big raise this year? If you were, you might be disappointed.
A recent study from Gallagher found that more than one-third of business owners will have to modify their salary-increase plans for 2021.
According to the findings, 62 per cent of employers implemented pay raises before the pandemic. However, due to complications associated with the pandemic, many businesses were forced to reduce employee headcounts, implement hiring freezes, and decrease salary-increase budgets.
Additionally, 43 per cent of business owners were forced to salary increase plans for 2021. Of these, 45 per cent expect to reduce raises, 35 per cent plan to suspend raises and freeze salaries, while six per cent plan to reduce salaries next year.
“Market reactions to the pandemic and the economic downturn are applying downward pressure to Canadian salaries and employers tell us that these compensation-containment measures will extend into next year,” Melanie Jeannotte, CEO of Gallagher’s Benefits and HR Consulting division in Canada, said in a news release.
“The impact COVID-19 will have on costs and revenue will be unpredictable in the year ahead, which is causing many employers to reconsider salary increases in an effort to preserve jobs in 2021," she continued.
Further, based on the findings, more employers are focusing on their employees' mental wellbeing--56 per cent of employers have increased overall employee-wellbeing initiatives during the pandemic.
Moreover, 19 per cent of employers have implemented additional support for their employees’ financial wellbeing.
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