Workers in Canada's energy sector should prepare for another year of belt tightening in 2016 as companies forecast slower wage growth from already reduced 2015 levels.
Energy firms anticipate wage gains of 2.9 per cent next year, down from actual wage growth of 3.1 per cent in 2015, according to a compensation planning survey by consulting firm Mercer. Wage gains this year have significantly lagged behind optimistic predictions from surveys conducted in June of last year, when energy firms said they expected wages would grow by 3.7 per cent in 2015.
Allison Griffiths, a principal in Mercer's talent business in Toronto, said she can't remember a year when energy has not had the largest wage gains of any major industry sector in Canada, including in 2015. That trend is poised to change in 2016, however, as high-tech companies forecast wage gains of 3 per cent, outstripping the energy industry's 2.9-per-cent wage growth.
"Energy is now part of the pack – they're in the middle there," Ms. Griffiths said. "But it's not all [wage] freezes. They're not having an increase of zero. They still are projecting some growth."
The impact of volatile energy prices this year is illustrated most clearly by the number of oil and gas companies freezing wages entirely. While 8 per cent of companies across the country said they froze wages for employees this year, 37 per cent of energy firms reported salary freezes for at least some of their workers in 2015.
Across all sectors, Canadian companies are projecting 2.8-per-cent wage growth next year, which is flat from 2015 and a decline from 3-per-cent growth in 2014. Companies in the United States, by comparison, are projecting average wage growth of 3 per cent next year, Mercer said.
"We're trying to do more with less," Ms. Griffiths said in a presentation at a Mercer forecast breakfast in Toronto. "I hear from almost every client that they're struggling with how to possibly administer a budget that's [growing by] 2.2 per cent or even 3.2 per cent. And it's not getting any easier this year, unfortunately."
Because of oil-price declines, Alberta is no longer the "red hot" region of Canada for wage gains, Ms. Griffiths added. Wages at companies in the Calgary area are forecast to grow by 2.8 per cent next year, which is only slightly higher than the 2.7-per-cent level for the rest of Alberta and Ontario, including the Greater Toronto Area.
Also Wednesday, consulting firm Hay Group released an even more pessimistic survey, forecasting base salaries will increase by just 2.4 per cent nationally in 2016 after they were forecast to climb by 2.6 per cent in 2015. The oil and gas sector is expected to have wage growth of just 1.5 per cent next year, which is the lowest increase in the country, Hay Group said.
Mercer also unveiled results Wednesday of a job satisfaction survey of about 1,000 employees, which found that 40 per cent of workers in the private sector are "seriously considering" leaving their employer, up from 36 per cent in 2011. Sixty per cent who said they are satisfied with their jobs are still considering leaving, the survey found.
Mercer senior associate Jayna Koria said the results are a paradox, and suggested that employers need to focus on retaining even their most satisfied employees. Senior executives had an 85-per-cent satisfaction level with their organization, yet 67 per cent of them said they are seriously considering leaving, she noted.
"We're realizing that satisfaction doesn't mean that people are going to stay," Ms. Koria said. "Employees are definitely committed, but they're committed for now. And employers are definitely in jeopardy of losing some really good talent if they don't change some of their value propositions in a timely fashion."
She said part of the reason for the restlessness could be that younger millennial workers are less loyal or less attached to staying with the same company, with 44 per cent under age 35 reporting they are seriously considering leaving their employer, even though the majority are satisfied with their jobs. Their attitudes appear to be shifting into older age groups as well.
"The younger generation definitely represents a larger population of the work force, and I think their views and perceptions of the workplace are now filtering out to all workers in the organization," Ms. Koria said.
Government and public sector workers reported higher job satisfaction, with just 30 per cent of workers saying they are seriously considering leaving.
In the private sector, by comparison, more companies have gotten rid of traditional pension plans and other expensive benefits, and have reduced job security assurances with new work arrangements, which may be influencing employee retention, Ms. Koria said.