MORE THAN HALF OF SAUDI ARABIA’S COMPANIES SET TO RAISE SALARIES THIS YEAR
▶ The average wage in the kingdom is expected to jump by 6% in 2024, driven by a hiring boom for Vision 2030 projects, reports Felicity Glover
Salaries in Saudi Arabia are expected to rise by an average of 6 per cent this year, as demand for talent continues to surge amid the kingdom’s efforts to diversify its economy away from hydrocarbons under its Vision 2030 plan, according to recruitment specialist Cooper Fitch.
Development remains a major focus in the Arab world’s largest economy, with progress being made across the country’s megaprojects, including the $500 billion city Neom, Red Sea Project and AlUla, Cooper Fitch says in its 2024 Saudi Arabia salary guide.
Over the past year, the kingdom has created 1.12 million jobs in the private sector as part of its plan to develop more than $1 trillion worth of projects, according to the Ministry of Finance.
The hiring boom is expected to continue this year, while women are entering the kingdom’s workforce at a steady rate. “Women’s participation rates … increased in the second quarter of 2023 to reach 35.3 per cent, exceeding the Saudi Vision 2030 goal of 30 per cent,” the ministry said.
“This rise clearly reflects the understanding of the importance of women’s participation in the workforce, and the success of women’s empowerment plans and initiatives launched by the government over the past years.”
Last month, Saudi Arabia also launched five new categories of visa for skilled professionals and investors that are aimed at creating employment opportunities and increasing knowledge transfer.
The new categories – special talent, gifted, investor, entrepreneur and real estate owner residency – will offer visa holders “unparalleled opportunities for settling in Saudi Arabia”, Majid bin Alkassabi, chairman of Saudi Arabia’s board of the Premium Residency Centre, said at the time.
While average salaries in the kingdom will jump by about 6 per cent this year, it is not guaranteed as it depends on the sector you are working in, as well as other variables, such as employee productivity and a company’s salary budget.
According to Cooper Fitch’s annual salary guide, more than half of the surveyed companies intend to increase salaries this year.
Nearly 60 per cent of respondents also expect to increase their headcount, but 29 per cent are preparing to reduce the size of their workforces, the study found.
“In line with the realisation of Vision 2030, Saudi Arabia’s portfolio of gigaprojects and the development of new industries such as electric vehicles have positively impacted recruitment and remuneration over the past year,” says Vilius Dobilaitis, managing partner of finance, sales and marketing at Cooper Fitch.
Meanwhile, more than a fifth of respondents (22 per cent) plan to reduce salaries over the next 12 months, which is “unexpected given 2024 is likely to see such high levels of demand for talent”, according to the Cooper Fitch study.
“Equally concerning is the fact that fewer than half of these construction and consulting firms intend to raise salaries in 2024,” it adds. “Organisations that find themselves in this position are likely to struggle to attract and retain the best talent in such a competitive recruitment market – especially among Saudi Arabian nationals.”
In what will be good news for employees in Saudi Arabia, 78 per cent of companies that responded to the Cooper Fitch survey plan to pay annual bonuses based on their 2023 financial performance.
This compares with 22 per cent of companies that are not planning to reward employees with a bonus this year. Of the companies that will pay bonuses, 24 per cent will give staff a one-month boost to their salaries, 21 per cent will pay two months and 18 per cent are planning a threemonth bonus.
Some employees working in sectors such as financial services, investment management, property and telecoms can expect a six-month bonus, according to Cooper Fitch. “Of the 22 per cent of companies that do not intend to pay bonuses, the highest proportions operate in the fields of construction and consulting,” the recruitment specialist says.
“This is unexpected given the unprecedented levels of development currently taking place in Saudi Arabia, as the nation pushes ahead with large-scale projects related to Vision 2030.”
Benefits are an important factor in retaining and attracting top talent to a company.
While mandatory benefits in the kingdom include health insurance, paid leave and the end-of-service gratuity, there is an increasing focus on well-being, workplace savings, education, child education allowances and flexibility, according to a survey conducted by Swiss insurer Zurich International Life in October last year.
A majority (84 per cent) of employees in Saudi Arabia said they would willingly change jobs for a new role with the same pay but better benefits, the survey found.
About one in four employees in the kingdom have also switched jobs in the past year, attracted by better remuneration, enhanced employee benefits and professional advancement opportunities, Zurich Life said.
“Employee benefits have taken centre stage and are rapidly evolving, pushing employers to adopt a holistic approach to talent retention,” Adam Watterson, senior executive officer at Zurich Workplace Solutions, said at the time.
“One of the trending areas is workplace savings and pensions for expatriates concerned about their retirement planning. End-of-service benefits will play a pivotal role in drawing talent from international markets and fostering financial stability.”
Over the past five years, roles such as patient care technicians, information system analysts, building information modelling co-ordinators, health and safety managers and human resources operations specialists have emerged as the fastest-growing jobs in Saudi Arabia, according to a LinkedIn survey last month.
The property consultancy services market in Saudi Arabia has substantially expanded, according to recruitment specialist Michael Page.
This has prompted “a corresponding surge in activity among major real estate consultants, who have been augmenting their local teams to better address the evolving needs of their clients”, Michael Page says in its 2024 UAE salary guide, which compares the two markets.
Project management consultants will also be in demand in the kingdom, with “major client-side organisations now seeking talent from the international market through headhunting efforts”, it adds.
Meanwhile, 24 per cent of respondents to the Cooper Fitch survey expect a shortfall in available talent this year, with management and leadership roles taking the top spot.
Other in-demand roles include employees with analytical skills, as well as experience in sectors such as engineering, software development, sales, finance and data science.
A quarter of the Cooper Fitch survey respondents expect a shortfall in available talent this year