Over 80% of GCC firms boosted compensation and benefits

Looking ahead towards more economic growth and attracting more talent, more than 8 out of 10 organizations in the Gulf Cooperation Council (GCC) are increasing compensation and benefits to their employees. That is according to an annual report from HR consulting firm PROCAPITA that explores key recruitment trends across the region.

Gathering data through a survey of HR leaders and professionals, the report found that 85% of GCC organization gave their employees a pay rise in 2022. That rate was highest in Saudi Arabia, where it was 88%.

Being mostly modest increases, the rates at which wages have increased were mostly found to be below 5%, with 63% of organizations saying they intended to increase wages at an increment of 1% to 5%. Only 11% of organizations said they would increase wages at a rate of over 10%.

The labor market in the GCC is highly driven by monetary benefits. A majority of the organizations surveyed (63%) provided their employees with annual bonuses. Looking ahead to 2023, 40% of the participants will provide either a salary increment or a bonus, while a similar percentage of organizations will provide both to their employees. Only 20% told PROCAPITA they would provide neither in 2023.

Reasons for why these organizations are increasingly generous can be found in a number of factors. First and foremost, business activity has increased as the economy recovers from the pandemic and comes to terms with growing global inflation.

In addition, there has been a war for talent raging in the GCC, where the majority of workers are foreign born residents. There is a pressing need to retain people and generous benefits entice them to stay aboard.

Good benefits are a major motivating factor for employees in the GCC. According to the survey, a whopping 85% of KSA employees said they quit a job because of a lack of compensation and benefits. That figure was 72% across all of the GCC region.

High on the list of reasons for leaving a position are “lack of career development opportunities” and “lack of employee appreciation,” another category in which inadequate compensation might factor in.

“The majority of the participants are providing non-monetary benefits as 89% also provide at least one type of non-monetary benefits. Private medical insurance remains the most common form of non-monetary benefits provided to employees at 83%, followed by flexible working hours at 55%,” the report noted.

Some other non-monetary benefits include flexible working houses, the option to work from home, and even life insurance.