Canadian wage slump means HR must bolster engagement through non-financial incentives

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New data from Statistics Canada has indicated that wages aren’t keeping up with inflation and the rising cost of living and HR experts have warned that non-financial engagement strategies are more important than ever.

Statistics Canada released data showing Canadians' average weekly earnings increased by just 1.1% in 2011, the smallest increase since the GFC. CIBC World Markets deputy chief economist Benjamin Tal warned wages are actually going down in real terms. "We will be lucky if we keep up with inflation over the next 12 months. It's a reflection of softer hiring in the public sector, a slower construction industry and even in the manufacturing sector we're seeing a shift from high-quality to low-quality jobs," Tal said. He added, however, that the trend is cyclical as opposed to structural in nature and that wages should pick up again once the labour market improves.

Indeed, wages did grow, albeit slightly, in every province except Ontario and Nova Scotia. The largest increases were in Saskatchewan, Prince Edward Island, Newfoundland and Labrador.

In the meantime, HR experts have assured organisations to heed the growing body of research which indicates that while salary is a motivator, employee engagement is largely driven by other drivers. Related article: Time to get past the carrot and the stick

According to Life by Design, the seven engagement drivers are:

  1. Leadership – Inspiring leadership that keeps employees informed and appreciated

  2. Relationships – Good, positive, open and collaborative relationships between leaders, co-workers and teams

  3. Job fulfillment – The nature of the day-to-day work is energising and meaningful

  4. Purpose – The organisation communicates a meaningful purpose, beyond just making money

  5. Work-life balance – An environment where work/life balance is supported and encouraged

  6. Opportunity – A culture of constant learning, full of development opportunities, where future career prospects are consistently communicated

  7. Reward – Clear links between performance and company objectives with rewards for contributing to the company’s success


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