A GCC-wide survey of 600 multinational companies and locally-owned conglomerates has forecast that salary increases will average 5 percent in 2016, down from an anticipated 6 percent in 2013, 5.5 percent in 2014, and 5.1 percent in 2015.
According to the GCC Salary Increase Survey conducted by Aon Hewitt, Qatari firms estimated 5 percent salary growth for 2016, lower than 2015 predictions which stood at 5.2 percent. Actual salary increase figures for 2015 in Qatar stand at 4.7 percent.
Aon Hewitt is a global talent, retirement and health solutions business of Aon plc.
According to the survey, GCC states have seen GDP levels drop due to weak global oil prices, with less foreign direct investment being recorded amidst security concerns in the region and struggles amongst large economies such as Russia and China. The situation, however, has clearly had a somewhat limited effect on firms, with most by leading employers still planning to increase the salaries of their employees by a good amount next year.
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. Despite this, the GCC is faring much better than other oil producing countries in the Middle East and predicted increases in compensation will also help to ease inflationary pressures on employees while markets rebound.
With GCC states averaging 5 percent, Kuwait tops chart with 5.2 percent projected increase, while Bahrain rounds out the list with a projected 4.7 percent increase.
Robert Richter, GCC Compensation Survey Manager, Aon Hewitt Middle East, said: “Salary increases typically take into consideration a number of other factors which go beyond the general economic climate. These include company performance, the need to reflect promotions and the need to ensure that employees at the same grade remain within a single pay band. Overall the outlook for 2016 may not be as positive as recent years, but the news that employers are predicting salary increases in the five percent range next year should come as a comfort to employees, suggesting that there is still optimism in the market.”
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