Revealed: How much salary hike will Saudi workers get in 2017

Revealed: How much salary hike will Saudi workers get in 2017
Updated 04 September 2016

Revealed: How much salary hike will Saudi workers get in 2017

Revealed: How much salary hike will Saudi workers get in 2017

JEDDAH: Here is a good news for employees in Saudi Arabia.
A GCC-wide survey of 600 multinational companies and locally owned conglomerates has revealed that workers in the Kingdom are expected to get 4.9 percent increment – highest in the Gulf region – next year.
Conducted by global recruitment company Aon Hewitt, the survey results revealed that Saudi workers will actually receive 4.6 percent increment this year.
Regionally, it projected that salary earnings will increase an average of 4.7 percent in 2017, demonstrating a more optimistic outlook across the board as GDP growth is also expected to climb in the year ahead.
The same survey noted that in 2016 the region saw an average salary increase of 4.3 percent, which although positive, is down from an anticipated 5 percent increase for the year.
The survey also notes that actual salary increases for the year 2016 have been the highest for pharmaceutical, media, and food/beverage/tobacco industries. The industries with the lowest salary increases for 2016 are telcos, construction and oil & gas, although salaries in each of these three sectors are expected to rebound year-on-year in 2017.
According to the latest GCC Salary Increase Survey, salaries have been largely influenced by fluctuating oil prices and states' initiatives to diversify national economies. While 2016 proved to be a challenging period for economic expansion in some markets, over the next few years new policies governing inflation, taxation, diversification, and commodity pricing are anticipated to come into effect and lead to a general upswing in GCC salaries.

Lower oil price impact
Moreover, the impact of lower oil prices and reduced public spending has not had the detrimental impact that some have anticipated, with most employers surveyed increasing the salaries of their employees this year and planning for even greater increases next year. As governments cut back on subsidies, refocus spending on large mega-projects, and with the announcement to introduce a region-wide VAT of 5 percent in January 2018, real GDP growth is expected to climb across the region in 2017 to 3.3 percent – up from 3 percent in 2016, according to the IMF.
Both UAE and Oman-based companies projected an average salary increase of 4.6 percent for 2017.
For the UAE, this marks a slight increase from the 4.4 percent average salaries growth seen in 2016. Oman's outlook for 2017 also shows a marked increase from its latest 4.2 percent increase noted in 2016.
Kuwait-based organisations have estimated salaries to rise by 4.8 percent in 2017, a significant increase from this year's 4.3 percent climb although down from a 5.1 percent increase in 2015.

Salaries in Bahrain
Companies operating in Bahrain have registered the third-highest salary increase projection within the GCC for 2017, reaching an average of 4.7 percent. Although optimistic, that falls just under the growth rate of 4.8 percent for this year--the highest in the region for 2016.
Although companies in Qatar have again predicted the lowest increase in the Gulf region at 4.5 percent for 2017, that outlook is significantly higher than the recorded salary growth of just 3.6 percent this year.
Robert Richter, GCC Compensation Survey Manager, Aon Hewitt Middle East, said: "Lower oil prices are likely to continue moderating the GCC's economic growth this year, but a refreshed focus on non-oil sectors along with sustained programs of state investment should underpin GDP expansion into 2017. Of course, it is important to remember that HR salary projections are subject to change. However, the latest predictions for 2017 salary increases do fall in line with the general economic climate with signs of optimism on the horizon."