Initial results from a recent salary survey by human resources firm Aon Consulting Canada show strong signs that organizations are slowing down on freezing salaries.

Among the 184 organizations surveyed to date for Aon’s annual “Pay Increase Survey”, only one out of 25 participants expect to freeze salaries in 2011, the company said Wednesday.

This is a dramatic difference from previous years when one out of six respondents implemented salary freezes in 2010 compared to one out of 3 in 2009.

Overall, the dampening impact on salaries caused by the 2009 economic crisis is subsiding, Aon says. Most employers are expecting to be in a position to afford more aggressive salary increases than they have implemented in recent years.

Salary increases are also likely in 2011, Aon says. Initial survey data is indicating that organizations are earmarking higher salary increases than in 2010. Aon’s projections indicate that salary increase budgets will be approximately 3% of payroll in 2011.

“While these are preliminary results, it nonetheless reflects an overriding upward momentum among Canadian organizations with respect to annual employee pay increases,” notes Scott Bunker, national leader of the firm’s human capital practice. “We look forward to sharing our final analysis in the fall.”

A report released Wednesday from consulting firm Mercer forecasts similar salary increases. According to the Mercer Compensation Planner, Canadian employers project average base pay increases of 2.9% for 2011.

IE