CIBC and Scotiabank boost base salaries for the majority of employees, commensurate with competing banks

Canadian Imperial Bank of Commerce and Scotiabank are matching moves at rival banks by increasing base salaries for the majority of employees by 3 per cent. CIBC is also working to increase the minimum wage paid to entry-level employees.

The increase to base salaries for employees at the lower end of the CIBC pay grade will take effect in July, according to a company memo sent by CEO Victor Dodig on Thursday. These job categories include branch customer service representatives, call center agents, and investment advisor assistants. Scotiabank’s salary increases take effect June 20. The changes align CIBC and Scotiabank with similar 3 per cent wage increases for low-paid employees that Toronto Dominion Bank, Royal Bank of Canada and Bank of Montreal have promised over the past two months.

CIBC is also raising the minimum wage it pays employees in Canada and the United States to $20 an hour in July, from the current $17. The bank is committed to increasing the minimum wage to $25 an hour by 2025, or the equivalent in local currency.

“These investments build on the consistent and targeted investments we make as we continue to ensure that we are competitively driven and the contributions of our team are recognized, particularly at a time when the cost of living is increasing,” Mr. Dodig said in the note.

Banks have fierce competition for talent in executive and technical roles, but also in customer-facing jobs in branches and call centers, as well as some back-office roles. This, along with high inflation driving up prices, has resulted in higher fixed costs for banks.

In mid-April, TD was the first major bank to offer an extraordinary mid-year payment for basic salaries, which goes into effect in July. The TD increases would cost about $290 million annually, and CEO Bharat Masrani said at the time that the pay increase was to honor employees for working in difficult conditions during the pandemic, and “and respond to the changing environment.”

RBC followed suit in May, promising a July raise of nearly half of its staff as part of a $200 million spending package that would make salaries and benefits more generous. Dave McKay, chief executive of the bank, said in the company memo that the higher pay was to “address market pressures and rising costs of living that have a greater impact on colleagues in lower salary ranges.”

BMO has also raised salaries for employees at lower pay levels by 3 percent, Chief Financial Officer Typhoon Tozon said in an interview last month. “We’re seeing compensation inflation in this type of job market, and I think that’s perfectly normal,” he said.

Some banks have offered one-time cash bonuses to employees at various times during the COVID-19 pandemic. But the increases in base salary and minimum wage, which can be doubled through regular increases at the end of the fiscal year in October, are a permanent increase in the salaries and wages of low-paid bank employees.

CIBC has also boosted its employee benefits for childcare leave, mental health services, gender affirming care, and fertility treatment coverage, among other things.

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