The findings, contained in GulfTalent.com’s sixth annual review of labour market trends in the region, reveal that employees in Qatar and Saudi Arabia received the highest pay rises last year, of 6.8% and 6.7% respectively, while those working in Oman averaged 6.4%, followed by workers in Kuwait at 5.7%.
Employees in the UAE and Bahrain saw the smallest increases in their paycheques, of 5.2% and 4.9%.
Salary gap narrowing
Arab and Asian expatriates enjoyed the highest pay rises in 2010 and Western expats the lowest, reflecting conditions in these individuals’ home countries, the report notes. “The trend, which largely reflects the prevailing salary increases in each group’s domestic market, is helping narrow the nationality gap in salaries which has existed in the Gulf for several years.”
Salaries back in India, for example, grew at 11.1% in 2010, compared with just 2.4% in the UK, where unemployment remains high in the aftermath of the financial crisis.
As for individual job categories, those in the human resources field saw the highest average pay increase at 7.1% – in sharp contrast to the previous year when HR professionals faced heavy job cuts and the lowest pay rises.
“With companies downsized and much more focused on performance than before, the HR function has taken on a renewed significance," the report says.
"Many HR professionals interviewed by GulfTalent.com reported being much more involved with the business as well as being measured against much more stringent targets." Lawyers, meanwhile, reported the lowest average salary rise, of 4.3%.
Among the other key trends cited was “a small but fast-rising Chinese presence" in the region, as employers “seek substitutes for [workers from] India and the Philippines, their traditional sources of skill,” and as a growing number of Chinese companies win major construction and energy contracts in the region, and often bringing the required staff directly from China.
Construction of a high-speed railway connecting Mecca and Medina, and a new port in Doha, are among the contracts recently awarded to Chinese firms, the report notes.
Qatar’s rise
Another finding was of Qatar’s rising importance as a destination for professionals. This trend, the report says, “has been driven by fast-rising salaries, falling cost of living, growing employment opportunities and an improving international brand”, boosted at the end of 2010 with its unexpected selection as the host country for the 2022 World Cup.
"While the UAE remains the most attractive destination for professionals, Qatar is closing in fast and, based on current trajectory, could well overtake the UAE in 2011 as the Gulf’s most popular destination for expatriates," the the GulfTalent.com study says.
As for Dubai, long the Gulf’s fastest-growing centre, it has shifted from being a "destination for professionals" to increasingly serving as "a source of talent for employers elsewhere" in the region. An estimated 5% of Dubai’s residents now commute daily to their jobs in Abu Dhabi, up from 1% two years earlier. "At the same time, with Dubai rents falling to much more affordable levels, commuting from neighbouring Sharjah has become less common."
Impact of Arab Spring
The study includes a detailed analysis of how the recent political turmoil in the wider Middle East region is likely to affect employment in the GCC.
"In the short term, any sustained turbulence in source countries, such as Egypt or Lebanon, is likely
to benefit Gulf]based employers as more professionals from those countries head for the safer havens of the Gulf states – similar to the mass migration that took place from Lebanon to the Gulf
during the 2006 conflict," it says.
"At the same time, coverage of regional unrest in international media may deter professionals further
afield, who tend to view the region as one homogenous block and consider it unsafe to seek
careers in a perceived ‘conflict zone’. This may negatively impact recruitment from Western
countries to the Gulf, as happened in 2003 in the immediate aftermath of the Iraq war."
The findings of the report, Employment and Salary Trends in the Gulf 2010-2011, were based on a survey of 32,000 professionals and 1,400 companies across the six Gulf Cooperation Council states.
