Saudi salaries are having a tough time catching up with the country's explosive cost of living
According to 85 percent of professionals surveyed in Saudi Arabia, the cost of living increased in 2013, with 31 percent claiming it rose by more than 20 percent, the 2014 Bayt.com MENA Salary Survey, conducted by Bayt.com, the Middle East’s number one jobsite, and leading market research agency, YouGov, revealed Sunday.
Increases have mostly affected the cost of rent, food &beverages, and education – 78 percent of respondents expect that it will continue to rise throughout the year. The rising cost of living has also limited respondents’ ability to save; 30 percent in Saudi Arabia claim to have saved nothing from their monthly salary.
Despite this, 48 percent of Saudi Arabia respondents believe that they are better off now, in terms of quality of life, than they are in comparison to their generational peers in their country of residence.
Fifty seven percent of Saudi Arabia respondents intend to look for a better job in the same industry in the next 12 months, and 63 percent believe that salaries in Saudi Arabia are on the rise. This is considered to be due to inflation and the rising cost of living, as well as opportunity and economic growth, and intense competition for attracting and/or retaining talent. Factors observed by Saudi Arabia respondents which are inhibiting salary increases include economy, employer-friendly laws, and poor corporate performance/decreased profitability. Twelve percent of respondents believe there is an excess of talent in Saudi Arabia.
“The results of the 2014 Bayt.com MENA Salary Survey suggest that salaries are not consistently keeping pace with the rising cost of living in Saudi Arabia. This seems to be a general trend across the MENA region that companies must address if they want to win today’s increasingly intense war for talent,” said Suhail Masri, VP of Sales, Bayt.com. “The Bayt.com MENA Salary Survey is an annual study that reveals the levels of satisfaction with salaries across the Middle East and North African region. This information is vital for employers and job seekers in the region alike; it helps them benchmark and anticipate their unique salary situations and make informed, empowered work and life decisions.”
“Overall, employees across the MENA region seem rather dissatisfied with their salary – with a significant minority unable to save anything of their wages. Undoubtedly, employees feel short changed, and an increase in cost of living and a presumption other employers pay more may mean we see significant churn over the next year as employers struggle to match employees expectations,” said Sundip Chahal, CEO of YouGov MENA.
Just 12 percent of Saudi Arabia respondents make regular investments, i.e. at least once a month, with the most popular investment product being property.
The majority (82 percent) of respondents in Saudi Arabia eat out at least a few times a month, with 30 percent choosing to eat out a few times a week and a further 23 percent eating out on a daily basis. Dining out is considered to be the top monthly expense by 36 percent, followed by travel (24 percent) and entertainment (20 percent). Holidays taken by Saudi Arabia respondents in the last 12 months have involved travel to international destinations (26 percent), though 27 percent have had vacations within Saudi Arabia. 34 percent of respondents have not been on holiday in the past 12 months.
However, expectations of a pay rise in 2014 are high in Saudi Arabia, though 40 percent of professionals surveyed confirm they didn’t receive a pay rise in 2013, the survey noted.
Across the MENA region, 67 percent of professionals surveyed indicate they receive a basic salary plus benefits, such as housing allowance, transport, children’s education and more; in Saudi Arabia, this figure climbs up to 78 percent. For four in 10 respondents who receive a basic salary along with other benefits, the basic salary consists of 51-75 percent of their monthly salary. 10 percent state that they also receive commission on top of their basic salary and benefits. The preferred pay structure in Saudi Arabia is a 100 percent fixed-pay structure (favored by 52 percent of respondents in Saudi Arabia).
A large proportion of Saudi Arabia is underwhelmed by their income, with 42 percent claiming to be dissatisfied with their pay, compared to just 4 percent who are highly satisfied with what they receive. 14 percent believe that men and women receive equal pay for doing the same work. A significant seven out of 10 (68 percent) professionals surveyed believe that the salary they receive is less than what other companies in their industry pay.
In 2013, 40 percent of Saudi Arabia respondents say they did not receive a salary raise. For those who did receive a raise, 54 percent were discontent with what they received while 46 percent were satisfied. Over a quarter of Saudi Arabia respondents (27 percent) do not expect to receive an increase in 2014, though 39 percent anticipate receiving a pay rise of up to 15 percent.
In Saudi Arabia, the most common benefits received by employees are personal medical insurance, personal annual air ticket and housing allowance. Bonuses are received by 31 percent of respondents. For 32 percent of Saudi Arabia respondents, foregoing part of their salary to work flexible hours is something they would consider.
According to 56 percent of Saudi Arabia respondents, their company does not pay for any overtime they do. Companies that do pay for extra office hours, for the most part, pay a normal hourly rate, though 60 percent pay time and a half. Only 13 percent of companies in Saudi Arabia pay employees for time spent doing civil service.
Three in 10 Saudi Arabia respondents state that loyalty to their company is not based on the salary they receive. Rather, they consider that their loyalty is based on opportunities for long-term career advancement (40 percent), their line manager (48 percent), and senior management (42 percent).
In Saudi Arabia, 60 percent of respondents receive an end-of-service gratuity, while 11 percent receive a pension upon retirement. 23 percent, however, receive neither, though 47 percent of those who do not currently receive a pension state that they are interested in a pension plan to which they would contribute a percentage of their basic salary, in addition to company contributions.
The majority of Saudi Arabia respondents (77 percent) have access to medical insurance for themselves through their company, and 54 percent have access to insurance for their dependents, too. For the most part, companies are responsible for payment on medical insurance claims – both for personal and dependents. Although, a further two fifths of respondents share responsibility of medical insurance payments with their employer. Insurance plans are active from the first day of hiring according to 49 percent of respondents in Saudi Arabia.
- Egypt passed the economic conference with flying colours, but what's next?
- Why the GCC really needs a VAT tax
- Selfies, jokes, and billions: Sisi 'boisterous' after economic summit, but the hard part has just begun
- 'Open for business': what did the World Bank have to say about Egypt's economic conference?
- Egypt's Economic Conference: formidable expectations, formidable challenges