Not a Member?  Become One Today!

Gulf Region Salaries Up, Hiring Optimistic Amid Turmoil
HR professionals received the highest salary increases in 2010

By Roy Maurer  3/28/2011
 
 

The employment market for the Persian Gulf states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) is expected to remain stable during 2011, with net job creation continuing at a moderate pace and salaries forecast to grow at an average rate of around 7 percent, according to a recent report.

The report, Employment and Salary Trends in the Gulf 2010-2011, was based on GulfTalent.com’s surveys of 32,000 professionals and 1,400 human resource managers employed by the 3,000 largest corporations in the region, conducted from December 2010 through January 2011.

Companies in the region are hiring less as unrest causes many of them to adopt a cautious stance, according to another report, recently released from Antal, an international recruitment company. The Antal Global Snapshot, a quarterly employment survey covering the hiring and firing activities of businesses around the world, has found that although the level of hiring at the professional levels of Gulf firms has dropped slightly, conditions seem to be improving for the next quarter.

2011 Salary Forecast

GulfTalent, an online recruitment firm for professionals in the Gulf region, found that private-sector salaries in the Gulf are expected to rise at an average rate of 6.6 percent in 2011 as employers fight to retain talent against rising demand from Asia.

Qatar and Saudi Arabia are expected to see average wage increases of 7.2 and 7.0 percent in a bid to draw employees from Dubai’s talent pool, the report noted.

Salaries in the United Arab Emirates (UAE) are forecast to rise by 6.3 percent, while those in Kuwait and Bahrain are expected to increase by 5.9 percent and 5.1 percent, respectively.

2010 Results

Salaries increased at an average rate of 6.1 percent across the region during 2010, similar to the 2009 level of 6.2 percent, but much lower than the 11.4 percent level seen in 2008.

Qatar saw the region’s highest average pay increase at 6.8 percent, given its fastgrowing hydrocarbon economy, massive government spending on infrastructure and continued need to attract and retain professionals, the report noted.

Saudi Arabia and Oman are enjoying reasonable economic growth largely because of heavy government spending. They experienced similar increases at 6.7 percent and 6.4 percent, respectively.

Kuwait, the UAE and Bahrain, which were hit worse by the global financial crisis, saw lower levels of pay increases.

Within the UAE, average salary increases stood at 5.5 percent in Abu Dhabi compared to 5.1 percent in Dubai.

Among sectors, retail led the increase, at 6.4 percent, while education had the lowest increase at just 3.8 percent. Among job categories, human resource professionals received the highest increases at 7.1 percent, in sharp contrast to 2009 when HR professionals faced heavy job cuts and the lowest pay raises. With companies having smaller staffs and being much more focused on performance than before, the HR function has taken on a renewed significance, GulfTalent reported. Lawyers had the lowest average increase at 4.3 percent.

Arab and Asian expatriates enjoyed the highest average pay raises, while Western expatriates received the lowest. With high unemployment in Western countries, many Gulf employers reported finding it easier and more affordable to attract Western professionals. Recruitment of Asian expatriates, in contrast, continues to be challenging given the fast pace of growth and rising salaries available in their domestic markets, according to the report.

Despite lower-than-average pay increases over the past several years, salaries of Western

professionals remain in absolute terms the highest among all nationality groups working in the Gulf. Pay for Gulf nationals ranks in second place. Expatriates from non-Gulf Arabicspeaking countries are next, followed by Asian professionals.

Hiring

The overall hiring situation in the Middle East and Gulf region looks positive, according to the Antal report. However, political events might affect the 46 percent of organizations predicted to hire in the upcoming quarter; it remains to be seen how these political changes will affect employment rates, the report stated.

Only 34 percent of companies in the Middle East said they were hiring at the professional and managerial level in January and February 2011. That compares with 56 percent of firms that said they were hiring in September and October of 2010, the last time Antal conducted its survey. While many of the companies that downsized during the economic downturn saw signs of recovery in the second half of 2010 and were hiring briskly in response, they are largely preparing for “slow, steady growth,” said Nizar Lalani, the chief executive of Antal in the Gulf.

About 46 percent of companies in the UAE surveyed are hiring, down from 53 percent in the most recent Snapshot survey in September 2010, Antal said. The survey showed that only 10 percent of UAE organizations are letting managerial staff go.

The rest of the current hiring figures in the Middle East and Gulf region were high. Saudi Arabia had the highest hiring levels, with 76 percent of companies hiring. The share of organizations hiring in Qatar was at 73 percent.

“This survey has unveiled new opportunities like hiring potential in the banking and construction sectors, which are otherwise thought to be sluggish. Over 60 percent of companies in these sectors are looking to hire in the next quarter,” said Lalani.

Employment Law

Legislative changes in 2010 followed two broad objectives, according to GulfTalent: increasing the share of employment opportunities for Gulf citizens, and improving the rights and protections of expatriate employees. Given the young population and large numbers of graduates entering the job market each year, creating employment for nationals continues to be a top priority across the Gulf region, the GulfTalent report found. With the public sector unable to absorb all the available pool, government pressure continues to increase on the private sector to make up for the deficit by replacing their expatriate employees with nationals.

Mobility

GulfTalent found that while the UAE remains the most attractive destination for professionals, favored by 49 percent of Gulf-based expatriates, Qatar is closing in fast, with a 44 percent following.

The study accounted for the political turmoil in the wider Middle East region, citing events in Tunisia and Egypt. Any sustained upheavals “could increase the supply of Arab professionals from regional hot spots who will seek careers in the Gulf, putting downward pressure on salaries,” the report said, citing the experience in mass migration of Lebanese professionals to the Gulf countries during the 2006 conflict in Lebanon.

Roy Maurer is a staff writer for SHRM.

 

Copyright Image Obtain reuse/copying permission