Salary increases for 2025: Budgets aligned with initial projections 

As the labour market continues to balance out and inflationary pressures ease, salary increase budgets are continuing to trend towards pre-pandemic market norms. Tracking budgetary changes, anticipating potential market changes and managing compensation spend continue to be key priorities for organizations. 

In September 2024, Normandin Beaudry published its 2025 Salary Increase Survey results. As companies continue to finalize their strategies moving into the new year, determining 2025 salary increase budgets remains a top priority. In response, Normandin Beaudry launched an updated pulse survey in November to re-evaluate 2025 market forecasts.  

In just two weeks, more than 300 Canadian organizations participated in our pulse survey to report how their original salary budget planning for 2025 has changed since last summer. Preliminary results signal that average salary increase budgets (excluding freezes) in Canada are 3.3%, which is slightly lower than initial summer forecasts of 3.4%. Total budgets, including the additional budget, are still aligned with initial forecasts of 3.7%. Overall, 34% of respondents have revised their initial salary increase budgets for the coming year, and of those, 74% decreased their budgets while 26% reported an increase.   

For organizations reporting a decrease of their original 2025 budget forecasts, the most common rationale included:* 

• Cost containment efforts (78%); and 

• Significant compensation increases previously implemented over the last several cycles (32%). 

Beyond the monetary aspect of compensation, organizations are turning their attention to other HR strategies, including:* 

• Ensuring competitiveness of total rewards programs (57%); 

• Focusing on employee engagement and communication (56%); and 

• Reviewing job architecture and hierarchy within the organization (33%). 

The Salary Increase Pulse Survey is still open until December 18.  

Participate now to ensure you receive a complimentary copy of the full survey results in the new year. 

* Organizations could select multiple answers.