Majority of Saudi firms plan to hire, pay staff bonuses in 2022: Cooper Fitch

A third of employers with bonus plans intend to pay out 3 to 5 months' gross salary

  
Image used for illustrative purpose Members of the Chambers of Commerce in the Saudi capital Riyadh vote for a new president of the commercial body in rare elections November 11, 2008.

Image used for illustrative purpose Members of the Chambers of Commerce in the Saudi capital Riyadh vote for a new president of the commercial body in rare elections November 11, 2008.

REUTERS/Fahad Shadeed

Hiring activity in Saudi Arabia will increase in the next 12 months, with the majority (68 percent) of businesses in the kingdom looking to increase their headcounts in 2022, a new survey by recruitment experts Cooper Fitch revealed on Wednesday. 

The number of employers with hiring plans for 2022 is higher than this year and the greatest demand for additional staff will be within major government restructuring projects, as well as developing sectors such as entertainment, culture, heritage and destination. 

“The recruitment market for 2022 shows all the signs of an unprecedented year of growth. It will bring considerable pressure on the private sector to retain talent along with acquiring new talent,” Cooper Fitch said in its report. 

According to Trefor Murphy, founder and CEO of Cooper Fitch, the percentage of companies with plans to recruit additional staff could go up to more than 68 percent, with all sectors being busy for the year ahead.

"We believe there is going to be an unprecdented demand for talent next year in Saudi Arabia and probably for the first time in over a decade, with the new talent demands placed around vision 2030," Murphy told Zawya.

"There has been a huge pull from the private sector, with replacements and continuation of PIF and Vision 2030 organisations hiring, and with lots of infrastructure projects being signed off, we expect the public sector to be extremely busy next year in Saudi Arabia."

Among those with hiring budgets, about a third (30 percent) have plans to expand their payrolls by 10 percent or more. However, 19 percent of companies will remain conservative, as they plan on making headcount cuts in 2022.  

Cooper Fitch polled more than 600 business leaders responsible for key decision making in their respective organisations in Saudi Arabia. Respondents were asked about the recovery from the health outbreak, recruitment activity, salary and bonus payment decisions for 2021 and 2022. 

Outlook for salaries 

For 2022, salaries across the kingdom will likely increase by an average of 4 percent. 

However, wage hikes will not be across the board, as 20 percent of companies said they would be reducing salaries by up to 10 percent, up from 13 percent who made the same decision in 2021, and 38 percent said they will not be granting any increases. 

In 2021, nearly four in ten (39 percent) of organisations, particularly in sales and marketing, legal, HR, strategy and technology sectors, increased the salaries of their staff by up to 10 percent or more. 

Cooper Fitch also noted that the employment market in Saudi Arabia recovered significantly this year, thanks to the country’s efficient vaccination programme that has allowed COVID-19 restrictions to ease. 

Bonus outlook 

This year, several employers have been generous to their staff, with 68 percent saying they granted bonuses within their company. Cooper Fitch’s study found a 4 percent increase on the bonus pay out from 2020, while 23 percent rewarded their workers with bonuses of three to five months’ gross salary. 

Next year, employees in Saudi Arabia can expect to receive bonuses as well, as 86 percent of companies said they will do so in 2022.  

About a third of the employers with bonus allocations (30 percent) will be paying three to five months’ gross salary as a financial reward, while 49 percent are looking to grant bonuses equivalent to one to two months’ gross pay. 

A small proportion of companies (7 percent) have plans to grant mega bonuses equivalent to at least six months of salary. 

Saudi Arabia has launched Vision 2030 as part of its strategy to diversity its economy and intends to invest at least $40 billion annually in projects and investments through the Public Investment Fund (PIF). 

Construction activity in the kingdom is back, while the World Bank expects the country’s GDP to grow by 4.9 percent next year. 

(Reporting by Cleofe Maceda; editing by Seban Scaria) 

Cleofe.maceda@lseg.com 

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© ZAWYA 2021


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