PROCAPITA has published its second annual “Human Resources Trends & Reward Report” for the year 2014 – 2015

PROCAPITA’s CEO, Mr. Mohamad Abo Al-Rob, stated “The report incorporates findings we have collected and analyzed from 65 prominent participant organizations, including 35 listed companies, with more than 3000 job titles across various industries in Kuwait. PROCAPITA HR Trends and Reward Report distinguishes itself from other publications in the industry by addressing 99 significant Human Resources areas that are essential for organizations to design an optimal HR framework that is aligned with their needs and strategic outlook. Moreover, this report has set precedent by providing the mechanism for administrating all monetary and non-monetary benefits, in addition to highlighting other significant topics such as Kuwaitization practices & challenges, recruitment forecasts for 2015, industry wise turnover analysis and key approaches for employee retention.”

Grading Structures and the Compensation Mix

According to some of the main findings concluded in the report, Abo Al-Rob continues his statement, “With regards to the Grading Structures and the Compensation Mix, the nominal increase in salaries in Kuwait is expected to be 5% on average during 2015 including the Cost of Living Allowance which was 3% in 2014 and expected to be 3.5% in 2015. Moreover, 79% of the participating organizations use the “Job Evaluation” method in building their Reward Management Infrastructure while 72% have a defined Job Grading Structure. Only 48% of the participating organizations stated that their salaries are aligned with the Market Pay while 42% of the organizations had no information regarding the market average salaries, 6% stated that they are below the market pay and only 4% stated that they are above the market pay.

Kuwaitization

On the nationalization of jobs, “Kuwaitization”, the report showed that 44% of the participating organizations who stated that they achieved the required Kuwaitization rates had incorrectly calculated their results due to their unawareness of the exact Kuwaitization rates stipulated for their industries. 56% considered achieving the required Kuwaitization rate as a challenge, while 44% of the participants did not face any challenge. 54% of the participant organizations stated that they did not receive any sort of support from governmental entities to assist them in achieving the required Kuwaitization rates while 46% of the participants stated that they have received governmental support. Only 21% of the participant organizations stated to have a clear and structured program strategy for Kuwaitization in their organization while 79% do not have one.  The main challenges identified in attracting Kuwaiti talent as stated by participant organizations were: Compensation (Salary & Benefits), Incentives and Career Advancement.

Employee Turnover

The highest turnover rate amongst the participating organizations was calculated to be in the Insurance Industry 26%, followed by Information & Communication Technology 21%, and FMCG 19.5%. The lowest turnover rates were in the Manufacturing, Media and Professional Services Industry at 6%. The three most effective tools in retaining talent as stated by the participant organizations were Monetary Compensation (Salary, benefits, bonuses) 54%, followed by Training & Development 19% and Advancement Opportunities 17%. The average turnover rate for the participant organizations was calculated to be approximately 12.3%.

Recruitment & Selection

In the selection and recruitment arena, 86% of the participant organizations have recruited new employees in 2014, and 79% stated that they will consider hiring new employees in 2015. The employee bands expected to be in highest demand in 2015 are skilled employees 21%, followed by Management 17%, Professionals 17%, Semi-Skilled 6% and finally Top Management 3%. The main challenges that have faced participant organizations when attracting and hiring new employees were Compensation, Advancement Opportunities, and Competition respectively.

Performance Management, Monetary & Non-Monetary Benefits

44% of participants stated that the most common method used for employee performance management is Management by Objectives MBO. As for the timing of appraisals, 55% of participant organizations conduct their performance appraisals in December and January. 73% of the organizations stated that they have an annual incentive scheme based on company / individual performance. One of the non-monetary benefits concluded from the report was that 86% of the organizations provide medical insurance benefit to their employees, and 55% of the participant organizations offer Flexible working hours benefit to their employees.