are you paying your employees enough?

are your compensation packages competitive?

With the COVID-19 pandemic ushering in sweeping changes in many workplaces, it’s more important than ever to hold onto skilled staff with experience and knowledge. Offering competitive salary packages is a key element to retain talent with the skills your organization needs to be successful and weather the pandemic. Now is not the time to be cutting corners on employee salaries, if you want to set up your organization for future success.

the impact of CERB on salaries

Despite the economic downturn set in motion by COVID-19, wages are on the rise in many industries. In spite of predictions that salaries would take a dive due to the crisis, we’re seeing the opposite, particularly for salaries in low and minimum wage jobs. This is largely due to the federal government’s strong response and the introduction of the Canada Emergency Response Benefit (CERB). 

CERB offered out-of-work Canadians payments of $2000 per month from April to October 2020. This is equivalent to working for $12.50 per hour in a full-time 40-hour-per-week job. In many Canadian provinces, this is close to or even above minimum wage (as is the case in Newfoundland, Manitoba, Saskatchewan, and New Brunswick). This incentivized low-paid workers to stay home and prioritize their health and safety during the pandemic over reporting to work for minimal increase in pay. Employers in several sectors such as manufacturing, warehousing and essential retail increased salaries above their typical minimums to entice workers. 

Though CERB is currently being rolled into EI, don’t expect a return to the pre-COVID-19 reality any time soon. During the recovery phase that followed the first wave of the pandemic, job creation was strong, and there was healthy competition for talent. And with a second wave of COVID-19 already beginning in many parts of Canada, a second wave of government support is not out of the question.

interested in learning about salary trends in 2021 and how to compensate your employees? book a meeting with our team to get exclusive early access to our 2021 salary guide.

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signs your employees are underpaid

  • employee turnover is unusually high

The first and most clear sign that your compensation packages are lower than market rates is that your employees are hightailing it to a new job as soon as they see a better paying opportunity. While non-monetary perks and benefits can help offset lower salaries, for most employees their base salary is the most critical part of their compensation package. If their salary is lower than market rates, you can bet they’re searching for opportunities where they’ll be paid fairly.  If low turnover is a chronic problem at your organization, take a hard look at employee salaries and ensure they’re keeping with what’s fair in your market.

  • your employees don’t seem engaged in their work

Employees know when their contributions are valued by their employer. Salary is a key part of measuring that. A low salary is a clear indication that their work isn’t respected. Employees who feel unappreciated and undervalued often feel disengaged from their work. That lack of passion often leads to work that doesn’t live up to its full potential. When employees are going through the motions and doing the bare minimum to scrape by, output at your entire organization can suffer. Worse, when employees are disengaged from their work, it can trickle down to the rest of their team and lead to an unhappy or toxic work environment for the rest of your team. 

  • it’s been awhile since you performed a salary review

How often are you benchmarking your employees’ salaries and ensuring that your salary packages remain competitive? It’s not unusual for salaries in high-demand fields to grow quickly, faster than inflation. If you’ve been coasting and offering employees small inflation-based increases for several years, you may find that some of your core employees are underpaid. A salary that was fair or even generous a couple of years ago may no longer be competitive in today’s market. If it’s been more than a year since you’ve done a salary audit, you may be surprised how much the market has shifted. Not sure what the going rates are like in your area? Download our 2021 salary guide to access salary data for a wide selection of job titles and locations across Canada.

  • you’re having trouble recruiting

Offering a salary that’s lower than expected sets your recruiting team up for failure. Job seekers are savvy and know their worth on the job market. There are plenty of free online tools to assess the value of their specific skills and expertise. If you’re not offering a salary in the appropriate range, they’ll look elsewhere. If you do manage to hire candidates at a low rate, there’s a good chance you’ll have to settle for less-experienced or less skilled candidates who higher-paying competitors have already passed over. As soon as those candidates gain experience you can bet they’ll be on their way to a higher-paying role and the cycle will repeat. The costs of continually replacing and retraining people quickly negates any cost savings, defeating the purpose and hurting your reputation as an employer.

interested in learning about salary trends in 2021 and how to compensate your employees? book a meeting with our team to get exclusive early access to our 2021 salary guide.

book it now