Conservative outlook for salaries and bonuses in GCC for 2018, says report

Times News Service

MUSCAT: A new report points towards another year of conservative and cautious compensation and benefits strategies in the Gulf Cooperation Council (GCC).

Predicted lower level salary increases are significantly down, with 20.96 per cent of companies expected to give only a 3.5 per cent increase or less and 10.51 per cent of companies expected to implement pay freezes, while 3.36 per cent believe they will have to reduce salaries, according to Informa’s sixth annual GCC Compensation and Benefits Trends.

The majority of 2018 survey participants do not have an optimistic outlook for their prospects of getting salary hikes this year. Nearly 20.96 per cent of companies expect to give only a 3.5 per cent increase or less, 8.95 per cent are planning to increase salaries by 4 per cent and 8.72 per cent aim to give a 5 per cent increase.

These are all markedly lower rates compared to 2017. However, instances of larger pay rises seem to be on the horizon for the GCC, as 17.23 per cent of the survey’s participating companies expect to increase salaries by 5 per cent to 6.5 per cent or even higher.

It’s clear that much of the uncertainty that characterised the 2017 C&B report is still in effect for companies operating in the GCC. This has led to much more conservative outlooks from many respondents after the surprisingly positive results of 2017 in these areas.

Value added tax (VAT) remains a question mark, attrition rates are up, projected pay increases are markedly down, pay freezes and reductions are predicted by a sizeable minority of our respondents, and when it comes to bonuses, confusion still reigns.

The result of all this uncertainty and volatility is that many companies are choosing to adopt the “wait and see” approach before making significant changes. This is underlined by the majority of respondents who haven’t invested in data capture technologies, or adjusted their healthcare provision policies or pension offerings, or taken VAT into account regarding benefits.

Despite these unfavourable predictions, there are also a number of data-driven outcomes that signify positive changes in the landscape, and point towards more GCC companies making dynamic investments in improving their C&B structures to deliver long-term success.

A crucial factor to note is that training and development investments are significantly up, which is emblematic of a growing proportion of companies’ desires to combat attrition by assertively driving employee engagement in order to make them feel valued.

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