Companies in the GCC are projecting an average 5% increase in salaries next year, down from 5.1% in 2015. Firms in Kuwait are preparing for the highest increase at 5.2%, while their counterparts in Bahrain have given the lowest projection in the region at 4.7%, slightly higher than last year’s 4.5%.
Companies in the UAE forecast a 5% pay raise, up from the 4.8% projection made for 2015, according to the latest “GCC Salary Increase Survey” by international human capital and management consulting firm, Aon Hewitt.
Firms in Qatar and Oman are in line with those in the UAE with a forecast 5% salary growth for 2016, lower than their estimations for 2015 – 5.2% and 5.4%, respectively. Companies in Saudi Arabia predict 5.1% salary increases for 2016, down from this year’s 5.4%.
In terms of actual salary increases for 2015, Saudi Arabia recorded the highest at 5.2%, followed by UAE (4.8%); Bahrain, Kuwait and Qatar (all 4.7%) and Oman (4.6%).
The GCC states have seen a drop in GDP levels due to declining oil prices. “Clearly, the impact of lower oil prices can be felt across the region, with governments cutting back on subsidies, reducing spending on larger projects and thinking about introducing some form of taxation,” said Mr Robert Richter, GCC Compensation Survey Manager at Aon Hewitt Middle East.
“Despite this, the GCC is faring much better than other oil-producing countries in the Middle East. The predicted increases in compensation will also help to ease inflationary pressures on employees while the markets rebound.”
The survey covered 600 multinational companies and locally run conglomerates in the GCC.