March 2021: Canadian Compensation Planning Pulse survey results

April 12, 2021

In order to provide up-to-date compensation planning information as our economy continues to evolve, we will continue to administer our US and Canadian Compensation Planning surveys as pulse surveys, with our next editions in August and November. We conducted our March 2021 Canada Compensation Planning Survey1 and welcomed responses from more than 350 participants. The questions about actual increases, incentives, and structure adjustments confirmed that there was little to no change from what employers predicted they would do at the end of 2020. However, additional questions provided new insights around how skills are beginning to influence performance management.

Minimal impact to salary, incentives and structure adjustments

With 41% of participating organizations reporting that COVID-19 had little impact on their financials in 2020, almost half responded that their increase budget for 2021 was unchanged or similar to that of prior years. The actual average merit increase delivered so far in 2021 was 2.5%, but that number dips to 2.1% when including those companies that did not deliver increases. Total increases were slightly higher at 2.7%, but the average fell to 2.3% when including those not giving increases. Of those companies that indicated COVID-19 had a high impact on their financials, the average merit increase was 1.6%, which includes those companies that did not provide increases.

Similarly, the majority of organizations reported little impact to both short- and long-term incentive payouts or grants.

Among those adjusting salary structures, still the dominant form of salary management, increases were 2.2% on average, with some companies, such as those in high-tech, implementing a higher adjustment, averaging 3.3%.

Skills in the performance discussion

Although 82% of organizations reported that they continue to assess the employees’ achievement of goals when determining performance, skills are now part of the discussion for many. Employers indicated that they look at the attainment of new skills (37%), the proficiency in skills in the current job (60%), as well as to potential to build additional skills (22%).

Is your organization starting to discuss incorporating skills into your talent strategy? If not, or if you’re early in your journey, perhaps taking a look at Mercer’s latest thinking on acquiring flexibility and agility through skills-based practices might be helpful.

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What’s next?

As we move into the second quarter, past a very busy time for many HR and Rewards professionals, one thing is for certain. This year, we’re facing new challenges and addressing new issues. Creating a flexible — remote and/or hybrid — workforce will start to dominate our discussion. Policies need to be developed, communications drafted, and governance put into place. The new shape of work may become a priority, stretching our thinking in new ways.

But don’t lose sight of the fundamentals. Remember that ensuring you are investing in the right jobs, people, and skills for your organization is critical for retention and attraction. Use this time to identify where you may need to conduct additional benchmarking or analysis. Doing so will allow you to effectively utilize new salary survey data when it is released later this year.

So far, 2021 is looking like an improvement from last year in many ways. Make sure you have the insights and data to make it great for you and your organization.

Questions? Call 866-605-1031 or email us at


This is the first of 3 pulse surveys that we will conduct in 2021. To participate in the next survey, sign up for notifications.

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