| SECTION 3
DETERMINING 2003 TO 2004
SALARY ADJUSTMENT
The
market varies from year to year. After identifying your
market salary for 2003 (Section
2), you should then examine
the current market pressures on salaries.
1. INFLATION FACTOR
The
inflation factor adds an amount (usually expressed in percent)
to allow for the percentage increase in the Consumer Price
Index (a restoration of the value of the dollar concept).
National CPI increases as well as those for Alberta, Edmonton
and Calgary are supplied below.
Figure
10 - Consumer Price Increase
Index (1992 = 100) Year-Over-Year Percent Change
2. DEMAND FACTOR
2003 was a particularly strong year for
Alberta’s economy, despite some early
uncertainty in the energy sector due to Kyoto. Unemployment
in the Professional, Technical, and Scientific Services
sector is currently hovering between 2% and 3%, and improvement
from 2002 of about 1%. These employment trends are expected
to hold steady for 2004, indicating a strong overall demand
for professional engineers, geologists and geophysicists,
and resulting in an overall demand factor estimated at
1.0%.
Members who are aware that their specific expertise is in short supply may want
to use a higher estimate for their demand factor; members
who are aware that supply in their field of practice is
abundant may want to use a lower estimate.
EXAMPLE |
| Using the factors outlined under our example, the June 2003 survey data
in Section 2 can be adjusted to June 2004 by adding
what you estimate the increase will be for each of
three factors for the 12-month period.
The salary adjustment estimates (as explained under each factor)
are as follows: Inflation
Factor (CPI) 3.3%
Demand Factor 1.0%
Estimated Salary Adjustment
from 2003 to 2004 4.3%
This example is illustrative only. Individual situations may vary considerably
. |
For you as a Human Resources Manager, these factors should be considered, but
may not necessarily be incrementally assessed for your salary
pool. Besides these external factors, pooled salary behaviour
also depends on such factors as: new hires, attrition,
internal promotions, etc.
Figure 11 - Employer Salary Surveys
Percent Change in Mean Salaries By Level of Responsibility.
|
