(CNW) -- Canadian companies took even more severe measures than originally planned for 2009, with hiring freezes, salary freezes, and a range of other measures designed to manage expenses in line with dramatically reduced revenue, and their outlook for 2010 can best be described as "cautiously optimistic". Views on the timing of recovery are divided -- with one third thinking it will happen in the next 8 months, another third not until late 2010, and a final third not until 2011 or later -- but there are some signs of modest recovery in terms of compensation practices in 2010, according to new research from Towers Perrin.

Although nearly half of the 143 Canadian companies surveyed froze salaries in 2009 (a much higher proportion than was anticipated in a similar January 2009 survey), only 11% anticipate a general salary freeze for 2010, although that number increases to 18% when it comes to senior executive salaries. And plans to reduce workforce-related costs in other areas look very different to 2009, with fewer companies looking to reduce costs further in areas such as salary reductions, training, benefits and overtime. Further, the number of companies planning significant workforce reductions in 2010 is far lower than 2009 (10% rather than 34%).

Perhaps because of doubt around the timing of the economic recovery, companies are being conservative with their salary budgets. The median salary increase for employees is 2.5% -- an increase relative to 2009 for many companies, but down about 1% from pre-crash norms in Canada.

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