Canadian Imperial Bank of Commerce CM-T and Scotiabank BNS-T are matching moves at rival banks by raising base salaries for a majority of employees by 3 per cent. CIBC is also boosting its minimum wage paid to entry-level staff.
The increase to base salaries for employees at the lower end of CIBC’s pay grade will take effect in July, according to a company memo sent Thursday by chief executive officer Victor Dodig. Those job categories include customer service representatives at branches, call centre agents, and investment adviser assistants. Scotiabank’s pay raises take effect on June 20. The changes align CIBC and Scotiabank with similar 3-per-cent pay raises for lower-paid staff that have been promised by Toronto-Dominion Bank TD-T, Royal Bank of Canada RY-T and Bank of Montreal BMO-T over the past two months.
CIBC is also raising the minimum wage it pays employees in Canada and the United States to $20 an hour in July, from $17 currently. And the bank is committing to further increase that minimum wage to $25 an hour by 2025, or the equivalent in local currency.
“These investments build on the steady, strategic targeted investments we have been making as we continue to ensure we pay competitively and recognize the contributions of our team, particularly at a time when the cost of living has been increasing,” Mr. Dodig said in the memo.
Banks are in fierce competition for talent in executive and technology roles, but also in customer-facing jobs in branches and call centres, as well as some back-office roles. That, combined with high inflation that is driving up prices, has pushed banks’ fixed costs higher.
In mid-April, TD was the first major bank to offer an unusual midyear boost to base salaries, which takes effect in July. The raises will cost TD about $290-million annually, and CEO Bharat Masrani said at the time that the pay increase was to recognize employees for their work in difficult circumstances during the pandemic, “and respond to a changing environment.”
RBC followed suit in May, promising a July raise to nearly half its staff as part of a $200-million spending package that makes salaries and benefits more generous. Dave McKay, the bank’s CEO, said in a company memo that the higher pay was “to address the market pressures and the rising cost of living that is having a greater impact on colleagues in lower salary bands.”
And BMO also raised salaries for staff at lower pay levels by 3 per cent, chief financial officer Tayfun Tuzun said in an interview last month. “We are seeing compensation inflation in this type of a job market, I think that’s quite natural,” he said.
Some banks have handed out one-time cash bonuses to employees at various times during the COVID-19 pandemic. But the increases to base pay and minimum wages, which could be compounded by regular increases at the end of the fiscal year in October, are a more lasting step up in salaries and wages for banks’ lower-paid employees.
CIBC has also enhanced its employee benefits for childcare leave, mental health services, gender affirmation care and fertility treatment coverage, among other things.
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James Bradshaw