World Economy

Less Salary Rise in Arab States

Less Salary Rise in Arab StatesLess Salary Rise in Arab States

Salary increase forecasts for 2016 in the UAE and Qatar are recorded at 4.9%, a figure below 5% for the first time in five years, a report said, adding hikes in Saudi Arabia are expected to hover around 5%, much lower than the traditional 6% seen in the last few years.

The newly released 2015 Total Remuneration Survey Results from Mercer, a global consulting leader in health, wealth and careers, also noted that caution is also being witnessed with companies’ hiring intentions, which have considerably declined over the past year, TradeArabia reported.

In 2014, 71% of organizations interviewed for the survey stated they planned to increase headcount in 2015, but when asked the same question earlier this year, only 57% declared plans to increase personnel during 2015. In Saudi Arabia, the decline was from 79% to 66%.

Nuno Gomes, Information Solutions Business Leader at Mercer Middle East, said, “There is no doubt that 2015 has seen one of the biggest shifts in economic momentum in the Middle East in recent years. The rapid decline in oil revenue, which has resulted from oil prices falling from over $100 to less than $50 a barrel, is having a significant impact on the growth plans for businesses in the region.”

“This fall in oil income has led to cuts in government spending observed in the last three to six months, which is compounding the situation. Added to this are underperforming financial markets and regional conflicts, with the overall picture one that is subduing companies’ confidence and curtailing investment,” added Gomes.

“It is clear that 2016 is likely to be characterized as being a year of restrictions, caution and a focus on improved efficiency from compensation and benefits perspective,” Gomes explained.