A combination of the falling dollar and the rising cost of living across the GCC has led to unprecedented levels of discontent among regional employees, according to a study released this week. This is leading to more and more employees, not only considering switching companies, but also exploring opportunities in new industries and other countries both in the region and beyond.
The online salary and cost of living survey, conducted by the Middle East’s #1 job site Bayt.com in conjunction with market research specialists YouGovSiraj, polled15,000 employees in the six GCC countries across20 industry sectors, including automotive, finance, advertising, IT and pharmaceuticals.
The study found that employees in the UAE and Qatar were the highest paid last year, Qatar, the UAE and Bahrain also enjoyed the highest annual pay raises in the region, with Qatar averaging16 per cent a year and the UAE and Bahrain both coming in at17 per cent compared to12 per cent in Saudi Arabia, the region’s lowest average.
Across the GCC and across sectors, salary hikes were far outstripped by perceived cost of living increases. The disparity was most pronounced in Qatar, with a perceived average cost of living spike of38 per cent,22 per cent higher than salary increases. In Dubai, living expenses were perceived to rise by37 per cent, representing a gap of20 per cent.
The widening shortfall between salary increases and the perceived cost of living n the Middle East has led many to consider dramatic steps. In Qatar,50 per cent of respondents say increases in household expenses have led them to consider relocating to another country or returning home. Oman comes in second, with47 per cent, while Kuwait has the lowest numbers of professionals looking to leave the country, at32 per cent. In the UAE,37 per cent are thinking about moving abroad.
In the UAE employers are taking the hit of this economic shortfall, with many employees considering job migration to improve finances.40 per cent Of UAE workers say rising expenses might force them to look for a better job in the same industry and24 per cent say they would consider switching to another industry. In Saudi Arabia, corresponding figures were45 and19 per cent. Only15 per cent of people in Qatar and20 per cent in Oman said they would consider changing industries.
“In terms of perceived cost of living increases and what this is doing to retention rates, the numbers are cause for concern,” says Rabea Ataya, CEO, Bayt.com. “Around70 per cent of the survey’s respondents said they’ve held two or more jobs in the last five years. On average, people are changing jobs about once every two years. We also found that loyalty improved as salaries increased. Employers who do not close the gap between earnings and living expenses will have difficulty attracting and retaining people.”
He adds, “On a more positive note, a fair number of people tend to view their situations as being better than their peers,40 per cent of people in the UAE say they believe this,46 per cent in Qatar and38 per cent in Saudi Arabia. People are generally more content when they feel their lives measure up well against their peers, so how businesses reward employees in relation to each other can have almost as much of an impact as overall salary rates. A lot of human resource management is about perceptions.”
Such insights, says Nassim Ghrayeb, CEO of YouGovSiraj, underscore the importance of supplementing broad economic indicators with individual surveys. “The value of research like this is that it gets to the heart of what people think and feel about their employment status and about their finances, providing a grass-roots understanding of people’s beliefs and concerns and allowing employers to act accordingly.”
He adds, “The story here is not just about employees. The pinch is also being felt by businesses themselves, with many workers planning to move on. These results reveal just how much of a headache the spiralling cost of living and weak dollar is having on employers, who also need to consider their margins.”
In terms of industry, banking and finance topped the monthly salary scale and those in education fared the worst. Banking and finance also enjoyed some of the most generous raises in2007, with hikes averaging18 per cent.
The main findings of the Bayt.com/YouGovSiraj survey are available online at www.bayt.com.