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Nitaqat gives fillip to salary growth

By By GHAZANFAR ALI KHAN RIYADH: Saudi employees can expect an average 5 percent salary increase in 2012 while employers face very difficult times retaining their workers following the implementation of the Nitaqat system, said a survey on new salary trends.

The findings of the survey conducted by HayGroup, a major global consulting firm operating in 48 countries including Saudi Arabia, mirror the optimism of the country, with GDP poised to grow.

"Another key finding is that 30 percent of organizations surveyed have reported that employee retention has become more difficult even over the last 12 months," said Chance Wilson, general manager of HayGroup, on Monday.

The consultancy reports steady salary growth over the last 12 months, and forecasts another solid 12 months of growth ahead driven by Nitaqat and costs of living.

More than 250 organizations in the Kingdom, including those in the public sector, banking, and oil, gas and petrochemical companies contributed to this year's report which analyses salary information for almost 240,000 employees comprising both nationals and expatriate workers.

Referring to the ambitious Nitaqat program launched by the Labor Ministry, Wilson said: "As full force of the Nitaqat program comes into play, we are likely to see more favorable reward packages offered to Saudi nationals in comparison to the overall market."

On the value of money and changing trends in the employment market, HayGroup's manager for information services Wendell D'Cunha said salary increases equate to inflationary increases, ensuring that the value of money people earn has not diminished.

D'Cunha, however, said more companies in the Kingdom need to know how they are compensating their employees.

"They wanted to make sure that there is a fair distribution between the reward they are giving to their employees and the work they are getting done," he said. The companies are also assessing their pay packages and this has a bearing on how they retain the workers, he said.

Referring to the new initiatives of the Ministry of Labor, D'Cunha said that there would be no adverse impact of the Saudization initiative on foreign workers. However, there will be changes in hiring, a lot of new initiatives to retain Saudi employees, and focus on Saudization, he added.

Saudi nationals are paid 13 percent higher then the general market average when looking at total cash, he said.

Pressures on organizations to achieve their target quota of Saudi nationals are apparent in the trends discussed in the report and form part of a wider socioeconomic story.

D'Cunha said Saudi nationals are much more in demand and are now in a favorable position of being able to pick and choose between employers because organizations are obliged to comply with legislation committed to building national capability.

© Arab News 2011

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