DAMMAM -- A study conducted by Korn Ferry Hay Group has reflected that 80 percent of the organizations surveyed have increased salaries of their employees by an average of 3.9 percent in 2016. The report suggests that the high technology industry and transportation & logistics sector were awarded the highest salary increases of 6.2 percent and 6.1 percent respectively.
Korn Ferry, global people and organizational advisory firm, conducted human resources forums in Jeddah, Riyadh and Dammam and released the results of its 2016 compensation study.
One of the most heartening factors of the report was the stability factor of Saudi nationals in their jobs. The report revealed that more than 58 percent Saudis were working for the same business for five years and more.
Addressing a select group of senior business executives at a forum held Wednesday at Movenpick Hotel in Al-Khobar, Harish Bhatia, Regional Manager, Middle East, belied reports of slump in regional market and said: "GCC region has entered this period of low oil revenues with a positive buffer from the surpluses built in the last decade. In spite of the currently eroded commodity and oil prices, most governments in the region have been able to sustain key ambitions of their strategic growth plans. Hence, the economic activity and results of the first two quarters have been better than the very low expectations set in January."
He continued "the report suggests that salaries are forecasted to be increased by an average 5 percent next year; however, we foresee these forecasts projected by the companies may get revised slightly lower depending on the recent projection of full year business performance of 2016 by several large organizations."
According to the report, banking and the oil & gas sector continue to be the key employers in Saudi Arabia and the region. These two industries have witnessed relatively lower increases this year, but continue to pay a premium of over 30 percent when compared to the general average of the overall employment market in Saudi Arabia. The market sample comprises of 502 organizations that participated in the study across 18 industry sectors.
"The current climate of low oil revenues for the GCC governments will prompt fiscal consolidation, but also faster diversification into other industries for new sources of GDP growth. In such times, we can also expect talented and high potential employees to explore newer opportunities outside of the traditional employment options in public sector, oil & gas industry and banking sector jobs," Bhatia said
The report and presentation by Korn Ferry Hay Group also reminded the organizations to focus on good communication to its employees. "Lack of clear communication of future strategy in such uncertain times, often leads to disengaged employees; this makes an organization less ready for the future when the economy starts to pick up," he said.
This report is based on data gathered during Korn Ferry Hay Group's 15th Annual Salary and benefits study which surveyed the compensation trends of more than 500 organizations across a variety of sectors in the Saudi Arabian market. Korn Ferry Hay Group also runs similar surveys in the GCC countries, UAE, Qatar, Kuwait, Oman and Bahrain.
Talking about Saudization and workforce trend, Bhatia said 16 percent of the workforce sample (423,000 employees), which equates to almost 60,000 employees, have taken new jobs in the market in the last 12 months. "This statistic shows there is still significant new hiring in the market and it is focused on specialized roles for certain sectors such as health care, high technology, logistics and customer service jobs in various sectors," the report indicated.
Bhatia also pointed out a unique fact about Saudi nationals participation in the workforce compared to the other GCC countries. "Saudi Arabia is the largest GCC economy with a very large and young population; the participation of Saudi nationals in the workforce is across all levels in the organizations as per our demographic analysis. This is unlike many other GCC countries where nationals represent only in very senior management roles or junior customer services jobs. This well spread representation of nationals in the core jobs of several sectors is a very promising trend for the future," he said.
Participation of female Saudi national employees has also increased to 4.8 percent of the total workforce compared to 3.2 percent in 2014. This trend is favorable to the strategic priorities of the transformation vision.
"The Saudi nationals' workforce is also showing signs of maturity and stability as 58 percent of the Saudi national employees in the study are working with the same employer for over 5 years."
© The Saudi Gazette 2016