Data from the latest Salary Increase Survey (SIS) from Aon Hewitt, the global human resources business of Aon Corporation (NYSE:AON), showed that salary increase levels have risen over the last two quarters, a promising sign for employees across the GCC and MENA region. Projected salary increases for 2012 are standing at an average of 6.7%, with Kuwait, Bahrain, Egypt, Saudi Arabia and Oman planning to increase salaries most significantly over the coming year.
Data for the latest survey, collected in January and February 2012, came from more than 130 organisations across the Middle East across 25 industry sectors, submitting salary data for 7 countries. In terms of the year ahead, only 12% of companies in the GCC and Egypt are considering a pay freeze.
“Despite continued uncertainty elsewhere in the world about a return to economic growth, regional employers are showing a positive outlook overall. We are seeing some positive indicators coming out of the GCC and MENA about the year ahead, as demonstrated by the projected salary increases in the region,” Dr Markus Wiesner, MENA CEO of Aon Hewitt said.
“We are seeing an increasing trend towards linking compensation with performance, better placing companies to engage and retain their key talent. Without exception, all markets have indicated that a major portion of their overall salary increase is the Merit Increase, which acknowledges outstanding performance. The highest merit increase is projected in Egypt and Kuwait (6.8%) and KSA (5.8%),” Dr Wiesner, added.
Overall, across the Middle East, the figures tell a story of cautious optimism regarding salary increases, converging towards an overall budget increase of 6.7%. Higher or lower variations around this figure and trends towards pay freezes tend to be determined by industry or country-specific situations.
Many countries across the GCC and Egypt have witnessed a large number of organisations adjusting salary budgets upwards during the last quarter and, most notably, Bahrain saw the highest revision with a move from the 4.8% budget announced in August 2011, to 7.2% in early 2012. This is followed by Oman, where the salary increase projection went up to 7.5% against last year’s projection of 5.2%. Other countries that saw an upward adjustment in salary increase projections are Kuwait (6.9%), Egypt (11.9%) and Saudi Arabia (6.6%).