Average pay rises in Oman and across the GCC are set to be lower in 2016 than at any time over the past 10 years.
Average pay rises in Oman and across the GCC are set to be lower in 2016 than at any time over the past 10 years, despite the rising cost of living caused by cuts in government subsidies, according to the latest research released by online recruitment firm GulfTalent.
Professionals in the UAE are expected to enjoy the region’s second highest salary increase at 5.3 percent. Qatar is next with 4.7 percent, followed closely by Kuwait and Oman at 4.6 and 4.4 percent respectively.
“Many professionals in 2016 are likely to face a double-whammy of rising living costs coupled with stagnant wage growth. As a result, real salary increases net of inflation are expected to be significantly lower than in previous years” the report says.
One source of comfort for residents is falling rents in parts of the region, in an otherwise inflationary market, the report found.
The research report was based on GulfTalent’s survey of 700 employers and 25,000 professionals across the six GCC states. Drawing on its survey results, the study found that salaries across the GCC are forecast to increase at an average of just 5.2 percent in 2016, down from 5.7 percent in the previous year.
In addition to lower pay rises, the study reports a marked slowdown in recruitment activity, with employers much more cautious in adding to their payroll. Much of the recruitment activity is now focused on replacement hiring only.
Sectors that are particularly hit include oil & gas and construction, which depend heavily on government investment. On the other hand, retail has seen limited impact and healthcare is booming, driven by a combination of population growth and regulatory changes making healthcare provision mandatory for employers. 68 percent of healthcare companies surveyed reported an increase in their headcount during 2015.
The study found that, with fewer jobs in the market and candidates seeking stability, employee turnover had fallen in most sectors. It warned, however, that employers failing to meet the pay expectation of their top performers due to financial pressures could risk losing them to competitors.
According to the study, employers currently hiring are having much greater success in securing top candidates than in previous years and some are using this as an opportunity to upgrade their staff.
Some firms are also reporting greater success in attracting nationals, thanks to slower pace of hiring in the public sector.
An increasing number of firms have been reducing headcount, particularly in energy and construction.
The study also notes that, despite a marked slowdown, the situation in Gulf countries remains far more stable than in most other oil-dependent economies.
Source: TimesOfOman