Salaries in GCC: Employers 'Cautious' About Pay Rises, Bonuses in 2018

Published March 27th, 2018 - 09:31 GMT
Plenty of GCC firms plan to develop dynamic compensation strategies this year. (Shutterstock)
Plenty of GCC firms plan to develop dynamic compensation strategies this year. (Shutterstock)

Employers across the GCC are taking a cautious approach when it comes to their compensation and benefits strategies, with many predicting lower level salary increases, new data has found.

Informa's sixth annual GCC Compensation and Benefits Trends Report shows that salary increases are significantly down, with 20.96 per cent of companies expecting to only give a 3.5 per cent increase or less. Around 10.5 per cent of companies expect to implement pay freezes and 3.4 per cent believe they will have to reduce salaries. Similarly, fewer companies are willing to experiment with adjusting their healthcare provision package or offering wellness programmes.

It was also found that the recent value-added tax (VAT) implementation is adding to the caution permeating the landscape. At 58.6 per cent, the majority of companies will not consider VAT when deciding whether to increasing salaries in 2018/2019; while only 14.5 per cent said VAT would be an influencing factor. The remainder (26.96 per cent) are still undecided about the impact of VAT on salaries.

However, plenty of GCC companies are still planning to develop dynamic compensation and benefits strategies this year. 'Improving employee engagement' has become the top area of focus for 2018, mentioned by 45.3 per cent of the survey's participants. This is closely followed by 'improving employee retention', which is up to 41.2 per cent. To satisfy these focus areas, more companies are investing in training and development programmes, pension option offerings and vehicles to improve the link between employee performance and pay.

A similar survey by on current business conditions also showed optimism in the market. According to the 'Jobseeker Confidence Survey,' 8 in 10 job seekers expect business conditions in the UAE to 'improve' in a year's time. In regards to the availability of jobs specifically, 6 in 10 job seekers are either 'somewhat hopeful' or 'very hopeful' that they will find their ideal job in the next 6 months.

Even at the personal level, 87.6 per cent of UAE job seekers said they expect their personal financial position to 'improve' or at least 'remain the same' in the next 6 months. Similrly, 91 per cent of job seekers said they expect their career growth opportunities to either improve or maintain the same level in the next 6 months. 

By Rohma Sadaqat

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