Salaries in Saudi Arabia projected to grow 4.5% in 2020

Riyadh – Mubasher: Salaries in Saudi Arabia are projected to increase by 4.5% across industries next year, according to the annual Total Remuneration Survey (TRS) by Mercer.

The highest increase was shown in the life sciences industries at 5%. On the other hand, the energy industry is expected to see a 3.5% increase in 2020, compared to 3% in 2019.

“Saudi Arabia is constantly looking at new approaches to further progress and develop the workforce. In addition to annual increases in base salary, we have noticed an increasing number of talented Saudi youth being placed in leadership positions. This is key in creating a sustainable economy,” Basem Samara, Career Products Leader at Mercer in Saudi Arabia, commented.

“With a young demographic, there is a significant amount of movement in jobs in the Saudi workforce. To ensure business continuity, organizations must build attraction and retention mechanisms that cater and are tailored to these demographics,” he added.

Voluntary turnover rate has increased to 9% in 2019, from almost 7% in 2018, demonstrating an active job market. According to the survey, “the overall hiring outlook in Saudi is also positive with 52% of respondents planning to increase their headcount and 38% looking to maintain headcount in 2020.”

Moreover, the survey further noted that companies are providing higher increases to executives and managers than they are to other employees, signalling increased focus on leadership skills.

“We are seeing that leaders of many organizations are looking to enhance the employee experience as a retention tactic given the fierce competition for talent in the market. The contractual agreement between employers and employees will always have a significant weight, however, this is no longer sufficient. Employers must consider how they are perceived by their employees as an enabler to fulfil their professional and personal ambitions. This is crucial in keeping young talent engaged and motivated and will play a role in driving performance,” added Samara.

Mercer is a consulting firm and a wholly-owned subsidiary of Marsh & McLennan Companies, and its 2019 TRS survey was based on more than 470 companies in the Kingdom.