Saudi Arabia’s economic transformation benefiting business, says study

Raneem Younes, center, an intern at Careem gets a little help from a supervisor at the Careem offices in Jeddah. (GettyImages)
Updated 30 September 2018

Saudi Arabia’s economic transformation benefiting business, says study

  • The introduction of cost-of-living allowances for Saudi nationals and increased expat levy fees could potentially have a negative impact on employee compensation costs
  • The good news is that overall economic performance was strong across most organizations that we surveyed

RIYADH: The ongoing economic transformation in the Kingdom is already bearing fruit in the business sector according to a new study by the US-based consulting firm Korn Ferry.
The Korn Ferry 2018 Salary and Benefits Study claims that Saudi Arabia’s economic transformation strategy has led to impressive business results which are translating into measurable salary and bonus increases for employees at all levels, with high performers reaping the greatest benefit — landing bonuses of up to 120 percent more than the average.
Harish Bhatia, regional director of Korn Ferry, told Arab News, “We see a positive shift in Saudi Arabia where more organizations are recognizing and differentiating high performers by paying them significantly higher bonuses.”
He warned, however, that, there is “more to achieve by ensuring a limited bonus pool is used carefully to reward only average or higher-than-expected performances. Many organizations are still paying bonuses to poor performers, and we believe this is not the best use of the funds available to drive business performance.
“In mature global markets, this trend is more noticeable, with limited bonus pools strictly being paid out to employees who are making a difference to the organization’s top line and bottom line. This is even more critical for senior managers and executives,” Bhatia continued.
Korn Ferry’s study captured data from 437 organizations across 20 economic sectors in the Kingdom and included more than 420,000 employees.
Data showed average salary increases of 2.6 percent across all sectors, with financial services employees realizing average increases of 3.7 percent.
The introduction of cost-of-living allowances for Saudi nationals and increased expat levy fees could potentially have a negative impact on employee compensation costs, Bhatia suggested, but he stressed that “the ability for companies to support consistent salary growth across several sectors speaks to strong overall positive economic performance.”
It is the bonus data, according to Bhatia, that sends the strongest signals about changing business practices in the modern Saudi economy.
High-performing executives received a bonus equivalent to more than six months salary. That is 120 percent more than the average bonus pay out, clearly distinguishing for performance and sending a strong message that great performance will be richly rewarded.
“At the senior-executive level, we are starting to see a shift in reward schemes where companies are identifying and paying increased bonuses to high performers who are driving business results. That kind of variable approach to compensation sends a message that companies are moving from a long-term fixed-cost model to one that is more closely aligned with measurable performance and impact,” said Bhatia.
“The good news is that overall economic performance was strong across most organizations that we surveyed; more employees received bonuses compared to the previous year,” he said.
The challenge organizations have is finding a balance between managing the pressure of rising fixed costs and allocating funds to a bonus pool that is used to drive performance. One measure of finding this balance is to stop offering a bonus to low-performers, Bhatia pointed out.
The study also suggests that the Kingdom’s nationalization initiative continues to be a success. In the retail sector for example, employment of Saudi nationals increased from 21 percent to more than 35 percent as companies prepared for new Labor Ministry regulations on expat employment in key sectors that came into effect this month.


Organization of Islamic Cooperation to adopt Cairo Declaration on Human Rights in Islam

Updated 13 min 12 sec ago

Organization of Islamic Cooperation to adopt Cairo Declaration on Human Rights in Islam

  • OIC secretary-general notes that the organization continues to condemn the ideological rhetoric adopted by terrorist groups

JEDDAH: Secretary-General of the Organization of Islamic Cooperation (OIC) Dr. Yousef bin Ahmad Al-Othaimeen announced on Wednesday that the OIC will adopt the Cairo Declaration on Human Rights in Islam (CDHRI) after it is revised in accordance with international human-rights standards. The foreign ministers of the OIC member states are expected to approve the CDHRI at their meeting in Niamey, Niger in April.

 Al-Othaimeen was speaking at the 43rd session of the United Nations Human Rights Council (HRC), held in Geneva on Wednesday, where he highlighted some of the efforts the OIC has made to fight racism and xenophobia — including Islamophobia — claiming that they are the result of “intellectual and political resistance to cultural pluralism.”

He said the OIC, in cooperation with its partners, has prepared “a comprehensive and consensual approach to address incitement to hatred, discrimination and violence on the basis of religion.”

Al-Othaimeen’s speech, which was delivered on his behalf by OIC Geneva Permanent Representative Nassima Baghli, stressed that terrorism, including religious extremism, is a major source of concern for the international community. He pointed out that the OIC continues to condemn the ideological rhetoric adopted by terrorist groups and has established the Sawt Al-Hikma (Voice of Wisdom) Center, which focuses on addressing the ideological rhetoric of extremists.

His speech also reviewed the most common human-rights violations suffered by Muslims, referring to the detailed documentation from the UN’s own human rights bodies and the OIC of discrimination and violence against the Rohingya Muslims.

Al-Othaimeen explained that America’s actions in Palestine in recent months required the OIC to stress that any peace initiative between Israel and Palestine must be consistent with legitimate rights, foremost among which is the right to self-determination.

He also stressed the OIC’s support for Kashmiris in their pursuit of their legitimate right to self-determination in accordance with international resolutions and highlighted the OIC’s condemnation of Armenia’s continued occupation of Nagorno-Karabakh and seven regions bordering Azerbaijan.