Economic News/Trends and Analysis — September 1, 2009

Watson Wyatt Data Services Releases Results of 2009/2010 Salary Budget Survey Report


    -   Canadian employers optimistic for 2010.
    -   Western Canada remains economically strong.

    TORONTO, Sept. 1 /CNW/ - Watson Wyatt Data Services, a wholly-owned
subsidiary of Watson Wyatt Worldwide, today announced results of the 2009/2010
Salary Budget Survey Report.
    The report is based on the responses of 106 organizations in Canada and
894 organizations in the U.S. However, the information detailed below is based
on data from Canadian organizations only.
    Data were broken down by the entire sample combined, profit status,
industry sector, region/province and organization size. Data were further
broken down by employee group, which included the following:

    -   Executive
    -   Management
    -   Professional/Technical
    -   Administrative/Support
    -   Hourly

    Salary Budget Survey Report Overview

    Overall, actual increases to base salaries during 2008 remained strong,
averaging 3.7% across Canada. However, Canada was not immune to the global
financial crisis that took hold mid-2008 and by year end, the country was
faced with rising unemployment and many employers were struggling to make ends
meet.
    Federal regulations contributed to increased financial stability in
Canada. However, the cumulative effects of a previously strong Canadian dollar
and downturns in the manufacturing sector contributed to Canada joining other
countries in what ultimately became a global recession.
    As Canadian employers searched for ways to manage costs, 2009 salary
increase budgets were trimmed up to 1% from forecasts made in 2008, with some
employers implementing wage freezes for some, if not all employees.
    But results of the Salary Budget Survey Report are not all negative.
While only 79.5% of Canadian employers surveyed had budgeted to increase
salaries in 2009 that percentage will rise to 92.2% for 2010, which is higher
than the 91.4% of employers who increased salaries in 2008. The average
projected salary increase for 2010 is 3% for those granting increases (2.7%
when factoring in projected wage freezes).

    Compensation Increases

    Wage increases continue to be strong in the Not-For-Profit Sector, as
projected increases to base salaries in 2010 (3.8%) are notably higher than
those projected for organizations in the For-Profit Sector (2.9%).
    There were minimal differences reported on average for 2009 budgeted
increases across various industries. However, for 2010 there are some
differences among industries worth noting, including projected base salary
increases of 3.1% in Durable Manufacturing (compared to an average 2.4%
projected for Non-Durable Manufacturing), 2.6% in Trade (Retail/Wholesale),
2.8% in Insurance and 3.1% in Services.
    Alberta's economy had been booming for the past few years, aided by
all-time high oil prices and the oil sands. In late 2008, oil prices plunged,
and big projects and investment in the oil sands were delayed. And while the
Canadian economy is showing signs of recovery Alberta now finds itself in a
deficit, fueled by low natural gas prices and a strong Canadian dollar.
    Saskatchewan, along with Calgary led the way among regions surveyed in
reporting overall increases, averaging 3.7% in 2008. Employers in
Saskatchewan, experiencing a staffing drought in 2008, budgeted the highest
overall increase in 2009 at 3.3%, and are projecting increases in 2010 of
3.1%.
    Average percentage increases to base salaries for select regions,
industries and sectors (excluding 0% adjustments):

    -------------------------------------------------------------------------
    City/Regional Breakdown:     2008 Actual    2009 Budget    2010 Forecast
    -------------------------------------------------------------------------
    All Canada                        3.7            3.0             3.0
    Nova Scotia                       3.4            2.9             2.8
    Montreal                          3.4            2.7             2.9
    Greater Toronto                   3.6            2.8             2.9
    Winnipeg                          3.6            3.0             2.9
    Saskatchewan                      3.7            3.3             3.1
    Calgary                           3.7            3.0             3.0
    Vancouver                         3.6            2.8             3.1

    -------------------------------------------------------------------------
    Industry/Sector
    -------------------------------------------------------------------------
    For Profit                        3.6            2.9             2.9
    Not-For-Profit                    4.0            3.5             3.8
    -------------------------------------------------------------------------
    Trade                             3.6            2.9             2.6
    Manufacturing Non-Durable         3.6            2.9             2.4
    Manufacturing Durable             3.6            2.4             3.1
    Insurance                         2.9            2.8             2.8
    Services                          3.6            2.8             3.1

    All base salary increase percentages reported in this release reflect
general increases (including cost-of-living and/or merit components) and were
collected April through June, 2009.
    The 2009/2010 Salary Budget Survey Report is available online at WWDS.com

    About Watson Wyatt Data Services

    Watson Wyatt Data Services (WWDS), a wholly-owned subsidiary of Watson
Wyatt Worldwide, is a leading provider of compensation, benefits and
employment practices information to the global employer community. From
offices around the world, we solicit, analyze and publish an extensive library
of online, printed and interactive survey reports. Our compensation databases
are recognized worldwide as the most reliable source of current data for
compensation planning.

    Global scope, local knowledge ...

    Covering more than 97 countries across six continents, our data centers
in the U.S., Canada, Europe, Asia and Latin America annually compile reports
on the remuneration, benefits and employment practices of local and
multinational companies. Our "in-country" experts apply their local knowledge
of the varied employment markets, practices and customs to deliver a complete
compensation picture that can be used to create sound, market-based pay
programs for entire organizations. Our international databases contain
compensation information covering millions of employees based on the annual
survey participation of organizations ranging from emerging growth companies
to many of the world's largest conglomerates.
    In addition to compensation surveys, WWDS also publishes references that
help HR practitioners attract, retain, and reward exceptional employees. These
guides cover a wide variety of subject areas, including variable pay,
performance management and personnel policies on a local, regional and global
basis. For more information, visit our Web site at WWDS.com.



For further information: Cherie Langevin, Watson Wyatt Data Services,
Tel: (416) 813-4428, E-mail: Cherie.Langevin@watsonwyatt.com

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