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Salary increases for 2014 expected to dip

Canadian dollars.

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Canadian workers can expect a reduced bump in base pay in 2014 compared with this year, says a report released Monday by human resources firm Mercer.

The average increase is expected to be 3.1 per cent in 2014, a slight dip from the average actual salary increase of 3.2 per cent for both 2013 and 2012, Mercer said in a release.

However, that increase is higher than the one projected by The Hay Group, which released its findings last week. It said Canadian employees can expect a salary hike of 2.6 per cent in 2014, down slightly from its projection of 2.9 per cent for this year.

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In the United States, Mercer said the average increase in base pay is expected to be 2.9 per cent in 2014, a slight increase from 2.8 per cent in 2013 and 2.7 per cent in both 2012 and 2011.

"While we are seeing a flattening in salary increases across the country, competitive industries and markets continue to recognize that in order to attract and retain top-performing employees they're going to have to reward them," Iain Morris, leader of Mercer's talent consulting business for Central Canada, said in a release.

"This includes higher pay increases along with other non-cash rewards such as training opportunities and career development."

High-performing employees could see their salaries increase beyond the average, Mercer said. Companies are rewarding top staff with boosts as high as 5.1 per cent this year, while weak performers could see a paltry increase of only 0.1 per cent this year.

"Canadian organizations are striving to balance the need to retain key talent with their financial budgets, and in doing so are segmenting their work force and focusing on identifying and recognizing high-performing employees," Mercer said.

More companies are also offering their best staff non-monetary rewards such as job sharing or the option to work flexible hours, more formal career planning and sabbaticals.

The data is from Mercer's 2013-14 Canada Compensation Planning Survey, which the company has conducted annually for more than 20 years. It includes responses from 719 employers across the country who employ about two million non-union workers.

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But salaries are not equal in all industries or at all seniority levels. Mercer's report shows that executives and those in management will have a higher salary increase this year – 3.4 per cent and 3.3 per cent respectively. The report also indicates that working in Canada's resources industries has its benefits. The oil and gas sector is expected to see higher salaries this year, up 4.3 per cent, and up 4.2 per cent for 2014.

Provinces with a heavier focus on resources industries will also benefit from higher salaries. Alberta is projected to see an average salary increase of 3.2 per cent, followed closely by Saskatchewan at 3.1 per cent. Quebec, Manitoba and Greater Vancouver are projected to have the lowest salary increase at 2.8 per cent.

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