2024-10-26 04:00:00
This text is part of the special section Unionism
The Order of Certified Human Resources Advisors (CRHA) predicts a slowdown in salary increases in 2025, caused by a drop in inflation and the number of vacant positions.
The tide is turning on the job market. All jobs combined, employers plan to offer salary increases of 3.3% next year, according to the Order of CRHA. These predictions agree with those of the Conseil du patronat du Québec, for which future salary increases will be between 2.8% and 3.8%.
A clear decline compared to the 5.8% and 4.6%, reached respectively in 2022 and 2023, according to the Institute of Statistics of Quebec. “The scarcity of labor and inflation fueled these significant increases,” explains Manon Poirier, general director of the Order. In the five years before the pandemic, the average increase was 2.6%.
The context is changing
The fall in inflation largely explains this dynamic. This continued to decline overall in Quebec in 2024, even if the price of rent and food is still increasing. “Companies’ ability to pay also plays a role; they cannot sustain the rate of increases in recent years in the long term,” believes the general director.
The scarcity of labor is also reducing somewhat. The number of vacant positions in Quebec fell by more than 30% between the second quarter of 2023 and the same period this year. The unemployment rate reached 5.6% in September, compared to an average of 4.3% in 2022.
“The scarcity of workers still remains a concern in many companies, and salary remains a means of recruiting or retaining staff,” specifies Manon Poirier.
The forecasts of the Order of CRHA also reveal sectoral differences. Increases are expected to be equal to or greater than 3.5% in the energy, mining, oil and gas sectors, as well as in finance and insurance, as well as in professional, scientific and technical services. However, they will be equal to or less than 3% in public administration, agriculture, forestry, fishing and hunting and in public services.
What will not change in 2025 is that the question of salaries will remain a thorny subject in companies. To calm discussions, Manon Poirier suggests that employers be transparent and make salary scales public.
“Otherwise, employees may convince themselves of faulty data, such as thinking that certain workers or bosses earn much more than their actual salary,” she says. She adds, however, that managers must prepare for this transparency, in particular by ensuring that their salary structures are coherent and based on precise definitions of each person’s roles and responsibilities.
To date, five provinces require companies to publish their salary scale. The Quebec government has not yet given a clear indication that it wishes to move in this direction.
The art of negotiating
As 41% of Quebec workers are part of SMEs, salary negotiations are often based on individual discussions with the employer. A situation that employees do not always approach in the right way.
“These exchanges must remain friendly and must be based on facts,” says Annie Boilard, president of the Annie RH Network. If we use a very aggressive or demanding tone, it can become counterproductive. We must aim for collaboration. »
Employees must prepare adequately. She notices that many of them emphasize their efforts, the number of hours they work, the fact that they have deprived themselves of leave, etc. “But above all they must describe the positive impacts generated by these behaviors for the company,” recommends Annie Boilard.
Furthermore, since companies’ ability to pay is not infinite, they cannot always meet the expectations of their employees. “But we can find other means than wages to give benefits to workers,” underlines Annie Boilard.
An employee who, for example, obtains more flexibility to telework should save on transportation costs, food, clothing, etc. The employer can also reimburse certain costs, such as training and transportation, or grant longer vacations. “We generally calculate that an additional week of vacation is equivalent to 2% more salary, so it can compensate for a lower salary increase,” says Annie Boilard.
In recent years, employee expectations have shifted towards autonomy, flexibility and the opportunity to develop. “The rise in inflation has increased the importance of salary, but it is above all a recruitment argument,” indicates Manon Poirier. Retention requires a more global vision of working conditions. »
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Interview with Manon Poirier, General Director of the Order of Certified Human Resources Advisors (CRHA)
Interviewer: Good morning, Manon. Thank you for joining us today. Your recent predictions indicate a notable slowdown in salary increases for 2025. Can you elaborate on the key factors leading to this change?
Manon Poirier: Good morning! Yes, the primary factors driving this trend are the declining inflation rates and a noticeable drop in job vacancies. In 2022 and 2023, we saw inflated salary increases of 5.8% and 4.6%, respectively, largely due to labor scarcity and heightened inflation. However, forecasts suggest that salary increases will average around 3.3% in 2025.
Interviewer: Interesting. You mentioned the labor market’s changing dynamic. How does this assist employers in managing their salary budgets?
Manon Poirier: Certainly! With unemployment at 5.6%—up from an average of 4.3% in 2022—and a 30% decrease in vacant positions over the past year, companies find it challenging to sustain the high salary increases we’ve seen. As labor scarcity persists in some sectors, employers must balance recruitment and retention needs without compromising their long-term financial health.
Interviewer: Your report also highlights sectoral differences in salary increases. Which sectors are expected to see the highest and lowest growth?
Manon Poirier: Sectors like energy, mining, finance, and professional services are projected to see salary increases of 3.5% or more, whereas public administration and industries like agriculture and public services may experience increases of 3% or less. This reflects the varying market demands and economic conditions across different sectors.
Interviewer: Transparency in salary structures seems to be a critical recommendation. Why is this significant for both employers and employees?
Manon Poirier: Transparency helps mitigate misunderstandings and misinformation regarding salaries among employees, fostering trust within the organization. When workers are aware of salary scales, they’re less likely to hold misconceptions about earnings, which can lead to dissatisfaction and conflict. Of course, employers must be prepared for this transparency by having clear, coherent salary structures reflecting job roles and responsibilities.
Interviewer: Shifting gears to salary negotiations, what advice do you have for employees when discussing compensation?
Manon Poirier: It’s essential to approach negotiation with factual data and maintain a collaborative tone. Employees should highlight their contributions to the organization rather than simply focusing on hours worked. Additionally, organizations can explore non-monetary benefits, like flexible work arrangements or extra vacation time, to enhance overall employee satisfaction.
Interviewer: Thank you, Manon, for sharing these insights into the evolving salary landscape. It’s clear that both employers and employees have to adapt to these changing dynamics as we look toward 2025.
Manon Poirier: Thank you for having me! It’s an important conversation, and I’m glad to share our insights.
Manon Poirier: Transparency in salary structures is essential for fostering trust and reducing dissatisfaction among employees. When salary scales are made public, employees are less likely to assume that their colleagues are earning much more or less than they truly are. This helps to mitigate feelings of inequity and can lead to a more harmonious workplace. Additionally, it allows employers to ensure that their salary structures are consistent and competitive, which is crucial for attracting and retaining talent in a competitive job market.
Interviewer: That makes a lot of sense. Moving on to salary negotiations, you mentioned that many employees don’t approach these discussions effectively. What advice would you offer to them?
Manon Poirier: It’s important for employees to approach salary negotiations with a positive and collaborative mindset. Rather than focusing solely on their needs or grievances, they should highlight their contributions and the positive impacts of their work on the organization. Preparation is key—employees should come to the table equipped with data and examples that demonstrate their value. Furthermore, they should remember that negotiations can extend beyond just salary; flexibility in work arrangements, extra vacation days, or professional development opportunities are all valuable components of a compensation package that can be discussed.
Interviewer: As the economic landscape and employee expectations evolve, how should companies adapt their strategies for recruitment and retention?
Manon Poirier: Companies need to adopt a holistic approach to employee satisfaction that goes beyond salary. While competitive pay is important, many employees are now seeking greater autonomy, flexibility, and opportunities for career development. This means offering more remote work options, professional learning opportunities, and prioritizing work-life balance. Organizations that can create a supportive and enriching work environment will likely have a better chance of retaining their workforce, especially in the context of ongoing changes in employee expectations and market conditions.
Interviewer: Thank you, Manon, for your insights today. It’s clear that adapting to these changes is crucial for both employers and employees to create a sustainable and productive work environment.
Manon Poirier: Thank you for having me! It’s always a pleasure to discuss these important topics, and I’m looking forward to seeing how companies evolve in response to these changing dynamics.
