Gulf workers struggling to keep pace with inflation
The cost of living in the Gulf is outstripping salary increases, leading to an increasingly disgruntled workforce and a more volatile job market. Salaries in the region went up by 15% on average in 2006, but the cost of living shot up by 24% - and living expenses went up the most in the UAE.
That was the verdict of a comprehensive online study of Gulf-based professionals by the Middle East’s ‘#1 jobsite’ Bayt.com and leading market research firm YouGovSiraj. The survey interviewed a cross-section of employees in the six GCC countries across more than 20 industry categories, from automotive to pharmaceuticals.
Employers in Qatar and Kuwait awarded the highest pay rises in 2006, an average of 17%. The UAE was second on the list with 15%, but the Emirates recorded the biggest cost-of-living jump in the Gulf, 28%.
Looking at the regional picture, workers in the private sector fared better than their government peers, earning an average pay hike of around 17% compared to approximately 13% for public sector employees.
Rabea Ataya, CEO, Bayt.com, said: “This new study presents a clearer picture of labour market conditions in the Gulf than ever before and uses the additional expertise of a recognised market research leader, YouGovSiraj. The rapidly growing regional economy is creating new human resources challenges, and employers and employees alike need to understand their implications.”
A white paper titled ‘GCC Human Resources Overview - Salaries, Cost of Living and Loyalty’ summarises the main findings of the Bayt.com/YouGovSiraj survey and is available online at www.bayt.com.
The banking and finance sector awarded the most generous raises in 2006, increasing salaries on average by 19.5%. Healthcare professionals (excluding doctors) were among the least pampered, receiving only 11.2% more pay last year.
Nassim Ghrayeb, CEO, YouGovSiraj, said: “A detailed questionnaire was shared with more than 270,000 registered members of the Bayt.com website, representing the broadest cross-section of working professionals in the region.” He said: “The survey addresses conditions, perceptions and behaviour in each GCC country and in over 20 different industry sectors.”
Despite double-digit raises, most Gulf professionals want more - and employees in the UAE and Bahrain consider themselves the most deserving. The raise they felt they ‘deserved’ in 2006 was put at 33% reflecting the higher cost of living in both countries.
Employees were the least demanding in Saudi Arabia, where the average ‘deserved’ pay rise was recorded as 27%. Overall, public sector employees in the GCC feel the most unsung, claiming they justified a pay hike of 39% on average in 2006.
So is throwing in the towel the answer to higher earnings? Gulf countries with large expatriate workforces appear the most volatile. In Qatar, 37% of the survey’s respondents said they would consider going back to their home country or relocating elsewhere in the Gulf to boost pay.
Dubai stands to prosper from the itchy feet of disgruntled Gulf workers. Despite the cost of living in the UAE shooting up 28% according to the Bayt.com/YouGovSiraj survey, nearly half of the polled respondents said Dubai is their preferred place of work.
But the UAE’s many attractions might not include more cash. Kuwait comes in with the highest average monthly salary in the Gulf, US$3,100. Saudi Arabia is second with US$3,000, and the UAE is in fourth place with an average monthly pay packet of US$2,750.
Perhaps a change of career is the way forward? The majority of respondents in all the GCC countries would rather tackle a new industry than seek a better position in the same field in order to address the problem of higher living costs.
Bayt.com’s Rabea Ataya added: “Increasing inflation is putting pressure on lifestyles, but the general picture remains optimistic. On average, more than four fifths of respondents in the Gulf consider themselves ‘on a par with’ their peer group or ‘somewhat better off’. But perceptions of living standards appear to have a direct impact on the length of time people expect to stay in one location.”
Employees in Qatar are the most unsettled according to the survey, holding an average of 2.4 jobs in the last five years. And job-hopping across the region is most pronounced in the advertising, tourism, PR, travel and IT industries. Public sector employees may be less well paid, but they are more loyal. According to the survey, the average government worker spends more than seven years in the job while advertising employees stick around in the same post for less than four.
Ataya added: “Interestingly, the lack of growth opportunities, not pay, is cited as the number one reason for leaving a job. Employers therefore need to pay equal attention to career growth and performance recognition, as well as to ensuring that salaries are competitive.”
He said: “More than 60% of our respondents said they look for a job while they’re still in one, so employers should plan pay structures and growth strategies for their staff well.”
Founded in 2000, Dubai-based Bayt.com has offices in 10 regional cities - Abu Dhabi, Dubai, Riyadh, Jeddah, Al Khobar, Doha, Manama, Kuwait City, Amman and Karachi.
- Struggling to keep a competitive edge: Jordan’s pharmaceutical sector
- GCC governments urged to tackle inflation
- U.K. Labor Market, Private Wages Weaken at Record Pace, Reinforcing Dour Outlook for Growth and Inflation
- Norway's Labour Government Throws in the Towel
- British Pound Struggles to Hold Onto Gains