GCC salaries and Recruitment Initiatives under the Scanner - the Aftermath of the Financial Meltdown |
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Many GCC firms across the board are viewing salary rationalization as a cost cutting solution. Be it firms like Investment Companies or Oil support Services Companies, we are now witnessing a slash in the compensation for new hires, layoffs and change of recruitment plans as more and more firms are resorting to this method. 17 December, 2008, KUWAIT: "We are identifying this trend across various sectors especially Banking, Financial Services, and Insurance," says Ms. Safa Al Hashem, Chairman & Managing Director while releasing the latest report titled, "Global Financial Crisis and GCC Salary Trends" published by the Markets Insights Division (MID), of ADVANTAGE.
"However, this is a good time to be a recruiter in the labor market. It's a great advantage to be highly selective and acquire the talent that will help your Company survive," concluded Safa Al Hashem.
The highlights of the report are summarized below.
Employment expectations in the manufacturing and service sectors remain abysmal.
Banking and Finance sectors are the most adversely affected due to the economic turmoil in the last quarter of 2008. The forecasted salary Increase of year 2009 for the banking and investment sector is 9.2%, which is lesser than last year salary increase (12.2%).
The Real Estate (Development, Construction) sector is the worst affected sector, after banking and finance sector. The forecasted salary increase for 2009 is 10.3% that is marginally higher than the pay Increase of other sectors in GCC.
The FMCG and Oil & Gas sectors were enjoying the steep increase in their salary increases until the third quarter of 2008, 11.9% and 11.0% respectively, is forecasted to fall-down by 8.3% and 8.9% respectively (as forecasted) due to a sharp decline in crude oil prices in the international market and the changes in consumer spending behavior across GCC.
Healthcare sector stood at the bottom of the rankings for the last two years (8.1%,2008) and the trend is expected to be same during 2009 (6.1%) as well.
Fig 1: Average Yearly Salary Increase in GCC (2003 - 2009*) 
* Forecasted
And the looser is......
The UAE and Qatar were at the top of the rankings up to August 2008; with average pay increases of 13.6% and 12.7% respectively. The salary increase forecasted for 2009 show a downward trend of 10.9% and 10.2% respectively due to the recent economic downturn.
In other GCC countries like Bahrain, Kuwait, Oman and Saudi Arabia, the percentage of salary increase is also forecasted to fall to 8.4%, 8.1%, 9.7% and 7.8% respectively due to the prevailing economic downturn with many job cuts particularly in Investment, Banking and Real Estate sectors.
Recruitment Trends
Hiring expectations will drop to the lowest levels in four years, according to ADVANTAGE Report, with manufacturing and service sectors planning to cut payrolls rather than add jobs.
Vacancies in manufacturing and services are at the lowest during November 2008 in four years.
While hiring has slowed overall, top-level talent is readily available for many recruiters.
In November, for the first time in four years, more recruitment firms and placement agencies reported less trouble with recruiting compared to those that reported increased difficulty in the previous years.
The complete report will be available for download from www.consulting-advantage.com after 18th December 2008.
-Ends-
For further information, please contact:
Tel: +965 22463917 or +965 22497058;
e-mail: info@consulting-advantage.com;
website: www.consulting-advantage.com
© Press Release 2008
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Good report and I value M/s. Advantage Consulting's effort, but I have disagreement in so called forecast report. I believe AC did not do proper study for KSA.
The recent KSA budget of 475bn SAR spending proved that M/s. Stanton Chase International's 2008 CEO Census report were reliable, which stated 87.1 per cent of CEOs are 'optimistic' or 'very optimistic' on business growth in the next two years.
The reason for declaring 5% increases as a start to Saudi salary in the month of January 2009 point out to the 'War for Talent', that also demands salary increases to public and private sectors.
However, the steep growth of KSA shows in the report on The Saudi Gazette daily dated 25th December 2008 "there are 124,662 hotel rooms in the Kingdom of which 9,100 rooms are in Riyadh, and that 50,000 rooms are currently being constructed in various parts of the Kingdom including the mega economic cities that will be completed in the next three years".
Therefore, AC's forecast of 7.8% is not accountable for 2009 annual salary increase, and I believe it would be between 15% and 20% since KSA is bolder than before. So far in Saudi Arabia instead of pay-cut or employee lay-off plans, the professional and executive search plans are placed due to shortage of talents. [Report Abuse | Email to a Friend | Reply to this Comment]