If you think your salary has been stagnating lately, you may be right. Salaries in the region’s private sector continued to increase in the last few years, but they’re moving at a slower rate than in the pre-recession period.
The latest data compiled by recruitment company GulfTalent showed that between 2009 and 2013, workers in the Gulf Cooperation Council (GCC) countries saw their salaries increase by 5.98 per cent on average annually.
Before the global economic slowdown, between 2005 and 2008, private sector pay grew by 8.8 per cent on average every year. Recruitment specialists said the slowdown reflects the increasing talent competition and weakening inflation in the region.
Robert Richter, compensation survey manager at Aon Hewitt Middle East, noted that the recent gross domestic (GDP) and inflation rates are still below pre-recession levels. “That is the reason why salary increases were higher in comparison. If housing and school fees continue to rise, I would expect the salary increase to go beyond 5 per cent at some stage,” Richter told Gulf News.
Richter pointed out that salary increases are provided to employees primarily to cope with rising cost of living. “For example, salary increases in Latin America are around 25 to 30 per cent since inflation is above 30 per cent in some of these markets,” he added.
Prior to the global financial crisis, the cost of living in the GCC countries was skyrocketing, partly due to surging oil and global food prices, credit growth and government spending spree. A Gulf One Investment Bank report said the recession was a “blessing in disguise” for inflation, which declined from a peak of 11 per cent in 2008 to just 3 per cent in 2012.
Nuno Gomes, principal — information solutions business leader, Middle East at Mercer said that while the inflationary pressures have subsided, the number of people looking for new job opportunities is on the rise again. “In terms of competition and recruitment, and companies looking to increase their headcount, things are much more positive,” he added.