Riyadh, 10th September 2013: Companies across Saudi Arabia are predicting an average salary increase of 6% in 2014 – a slight increase on last year’s forecast of 5.8%, indicating a rise in confidence in the country’s economic outlook and a burgeoning business environment. This figure comes at a time when the Kingdom’s economy is growing, with economists forecasting a growth rate of 5.3% for 2013[1].
These are the latest figures from Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON), released as part of its annual Global Salary Increase Survey 2013. Based on data from a robust comparative group of over 500 organizations across the region, including 91 in Saudi Arabia, the report offers a unique snapshot of salary increase trends which, in turn, enables organizations to benchmark forecasts with the market in order to remain competitive.
Across the GCC, companies are predicting an average salary increase of 5.5% for 2014, a figure in line with forecasts made for 2013 and 2012, which were both at 5.4%, indicating a continued confidence in the economic stability of the whole region and an increasingly resilient business environment.
Among the participating GCC organizations, UAE based companies predicted the lowest salary increase at 5%, which is in line with last year’s predictions of 5.1% – indicating stability. Kuwait and Oman both estimated a 5.6% salary growth, similar to the 2013 predictions, while companies in Bahrain forecasted 5.2% – an increase on last year’s 4.7% projection.
|
Country |
Predicted Salary Increase 2013 |
Predicted Salary Increase 2014 |
|
Bahrain |
4.7% |
5.2% |
|
Kuwait |
5.8% |
5.6% |
|
Oman |
5.6% |
5.6% |
|
Qatar |
5.6% |
5.6% |
|
Saudi Arabia |
5.8% |
6% |
|
UAE |
5.1% |
5% |
|
Average |
5.4% |
5.5% |
Looking back to 2012 and comparing the predictions from the survey for 2013 (5.4%) with actual rises awarded earlier this year (5.3%), we see good alignment, allowing employees to feel confident the trend is set to continue into 2014
|
Country |
Actual Salary Increase 2013 |
Predicted Salary Increase 2013 |
|
Bahrain |
5.2% |
4.7% |
|
Kuwait |
5.4% |
5.8% |
|
Oman |
5.2% |
5.6% |
|
Qatar |
5.5% |
5.6% |
|
Saudi Arabia |
5.7% |
5.8% |
|
UAE |
4.9% |
5.1% |
|
Average |
5.3% |
5.4% |
Robert Richter, Compensation Survey Manager, Aon Hewitt Middle East, said: “Our latest predictions indicate that organizations in Saudi Arabia are increasingly confident in the Kingdom’s economy and are optimistic about future growth. It is promising to see that these figures are in line with recent years, showing stability and steady growth. We have also seen a clear correlation between performance and salary increases and whilst linking individual performance to pay is not uncommon, we advise employers to use annual bonus payments as the larger component for rewarding high performers. Salary increases typically take into a consideration a number of other factors as well as performance, including inflation, rises to reflect promotions, and the need to ensure employees at the same grade remain within a single pay band.”
Aon Hewitt has been conducting the survey on an annual basis across the globe for 36 years and launched it in the Middle East for the first time in 2009. The report is free to participating organizations and available at a price of $500 to others.
The survey is part of Aon Hewitt’s suite of evidence-based, research-led studies including Qudurat, Best Employers Middle East (BEME), Total Compensation Measurement (TCM™) and People Risk Index (PRI®).
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About Aon Hewitt
Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness. Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide.
For more information on Aon Hewitt, please visit www.aonhewitt.com.
About Aon
Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 65,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world’s best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon’s global partnership and shirt sponsorship with Manchester United.
Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon’s global partnership and shirt sponsorship with Manchester United.
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[1] London-based research firm Capital Economics
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