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Bahrain pay rises lowest in decade, despite rising costs

DUBAI, March 14, 2016

Average pay rises in Bahrain and across the GCC are set to be lower this year, than at any time over the past 10 years, despite the rising cost of living caused by cuts in government subsidies, according to a recent report.
 
The latest research report released by online recruitment firm GulfTalent, found that one source of comfort for residents is falling rents in parts of the region, in an otherwise inflationary market.
 
“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,” it stated.
 
The 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 per cent this year, down from 5.7 per cent in the previous year.
 
Saudi Arabia is expected to top the region’s pay increases, at 5.9 per cent. However, with inflation in the kingdom forecast at 4.7 per cent last year, real pay rises net of inflation will average just 1.2 per cent.
 
The professionals in the UAE are expected to enjoy the region’s second highest salary increase at 5.3 per cent, followed by Qatar with 4.7 per cent, and Kuwait and Oman at 4.6 per cent and 4.4 per cent respectively.
 
Meanwhile, Bahrain fared the worst among the six GCC states, with the projected salary increase of 3.7 per cent matching the forecast inflation rate exactly, leaving employees with no net increase in their purchasing power.
 
Recruitment slowdown
 
In addition to lower pay rises, the study reported 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.
 
The sectors that have been particularly hit included oil and 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. 
 
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.
 
The 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, it said. 
 
Job cuts
 
An increasing number of firms have been reducing headcount, particularly in energy and construction. Overall, 14 per cent of surveyed firms in Saudi Arabia reported plans to reduce headcount this year, compared with nine per cent in the UAE.
 
Several executives interviewed by GulfTalent reported that, despite operating below capacity, they were holding on to their specialist talent in the hope that the market will recover later in the year. If the current situation persisted, however, they would have no choice but to make painful cuts, the report quoted.
 
Despite a marked slowdown, the situation in Gulf countries remains far more stable than in most other oil-dependent economies, it added. - TradeArabia News Service



Tags: Bahrain | Saudi | GCC | job | pay | rise |

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