Employees in the region can expect salary increases of between 4.7% and 6%
Dubai, United Arab Emirates – 29 September 2015 – Middle East employees can expect pay increases between 4.7% and 6% in 2016, according to Towers Watson’s latest Salary Budget Planning Study*. The study, primarily covering private sector companies, shows that average pay rises outweigh the regional inflation rates, giving employees real increases for their wages.
Pay rises across the Middle East region are expected to reach 5% next year in the United Arab Emirates, Kuwait, Oman, and Qatar, while Jordan and Lebanon employees will enjoy average pay rises in the region of 6% and 5.8% respectively. Bahrain will have the lowest increases of 4.6%, while Saudi Arabia average rises will be 5.5%.
Laurent Leclère, Senior Consultant and Data Services Lead for the Middle East at Towers Watson, said: “Middle East employees can expect a steady rise in their incomes, with most countries in the region expected to have similar pay rises next year as in 2015. However, next year the real rise in their income might feel slightly less than this year, due to the growing inflation rates in the region”.
The outlook for the Middle East region next year is very similar in terms of wage rises but inflation is anticipated to rise compared to 2015, hovering at around 3%. Oman will witness the lowest inflation rate in the region, of only 1.8%, while Saudi will have the highest, at 3.5%. Only the UAE is expected to have a lower inflation rate next year, at 2.7%, down one percent from 2015. In Bahrain and Qatar, the average inflation will rise slightly, to 2.5% and 3% respectively, whereas Jordan and Lebanon will see a steep rise by almost 3%, from a negative inflation this year, which means the wage rises in real terms will feel lower.
Sectors that will see a higher salary rise in the UAE in 2016 compared to this year are Financial and professional services, as well as Energy and Natural Resources. Most companies plan to allocate the larger portion of their salary increase budget to high performers, while a few plan to share the budget allocated to all employees at same rate.
