Western Canada Leads in Management Wage Increases
Jun 01, 2012
Statistics Canada divides up labour to track and measure performance. One pool of talent is identified as the ‘Management Occupations’ that includes a number of white collar professionals such as (not a complete list):
- Financial, Human Resource, and Purchasing Managers
- Engineering, Computer and Information Science Managers and Architects
- Sales, Marketing and Advertising Managers
- Insurance, Banking and Telecommunications Managers
- Operations and Manufacturing Managers
As with inflation (2.94% in 2011), wages increase annually and from January 2011 to January 2012, in Canada, this distinct group of almost one million professionals experienced a wage increase of 4.3%. This is good news as wages keep pace of inflation in this management category. Not all categories were so fortunate in 2011 such as those in health occupations (wage increase of 1.2%) or sales and service (retail, cooks, real estate, bartenders, child care, etc. with wage increase of 0.3%).
For Alberta and British Columbia (BC) we see an even greater wage increase in the Management Occupations category which can have a substantial impact on employee mobility and client wage considerations. BC almost doubled the Canadian average with a 7.1% wage increase and Alberta doubled BC with a 14.4% gain. With the combination of significant increases in management wages in these two provinces, inflation, and a tight labour market we should expect a number of reactions from the labour market.
- Daryl Henry, Executrade VP of Southern Alberta suggested that two types of migration will occur to this category of labour. First, movement of management labour from other industries in Alberta and BC would be expected. Second, geographic migration from other provinces that have seen much smaller gains in this same management category, such as Ontario where wage gains were only 3.5%, should be expected. Within the recruitment industry we have to be prepared to consider labour skills from a point of transferability, not necessarily category specificity.
- Clients who have a structured wage band program may be lacking the flexibility to secure the top talent available because more flexible organizations can match the wage increases more quickly. Adaptability in this area is a significant advantage in the recruitment of the best talent notes John Perry, Executrade VP of BC. There is less time for red tape and the constraints imposed by wage bands. While wage bands have significant organizational benefits, they can cost an employer a great candidate. Hiring organizations and recruiting partners should recognize this possibility and create a plan upfront to address this.
- Wages that are growing at 14% are a very strong incentive for candidate relocation. For example, in January 2011 Alberta wage advantage over Ontario was 2.4%. In basic terms in this represents a $2400 wage advantage on a $100,000 annual wage; there is little incentive to relocate. However, as of January 2012 Alberta has an 11.7% advantage in wage, or $11,700 in additional wages, which can be a strong incentive to relocate. While the example is too unsophisticated to address real world dynamics, it does illustrate the advantage that Alberta and BC both have in recruiting and retaining labour as a whole in this category.
Hiring in Western Canada can be complex for firms and candidates. Simplicity would suggest, if you want a job done right, ask a specialist.
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