BrazilPROCAPITA HR Trends & Practices Report 2024: The results
Regional human capital consultancy PROCAPITA has released the 2024 edition of its annual HR Trends & Practices report, shedding light on the main developments and shifts in the GCC’s labor market.
For its report, PROCAPITA conducted a survey of leaders from 1,200 organizations from various sectors in the GCC, providing deep insights into developments across the landscape.
Employment growth
Employee growth rate remained positive in the GCC, with 66.7% of the participating organizations citing increases in 2023. The highest growth rate was recorded in KSA, which could be attributed to various labor reforms, including private sector investment and entrepreneurship initiatives, boosting the Saudi talent market forward.
On the other hand, organizations in Qatar cited a low employee growth rate in 2023 potentially due to the completion of the 2022 FIFA World Cup, which reduced the demand for talent.
70.1% of participating organizations in the GCC expect the employee growth rate to increase in 2024. Organizations in KSA have the highest expectation of growth potentially due to investment in various mega projects to boost tourism and the hiring for mega-projects such as NEOM.
The outlook for the GCC is promising, as organizations anticipate favorable advancements that will lead to economic growth and progress.
Causes of employees quitting
In the GCC, 64.6% of the organizations identified the prospect of new job opportunities as the main reason to quit their positions. Participating organizations in UAE, are the highest to cite such reason, which could be related to the “Green Visa” initiative.
Moreover, compensation and benefits stand as the second reason at 43% for talent quitting their jobs, compared to the year previous when compensation was the main reason at 71.5%, according to PROCAPITA. This shift indicates a change in the talent hiring trends, suggesting new attractive career opportunities for skilled professionals.
Recruitment
43.3% of participating organizations perceive competitive compensation offered by the neighboring markets to be a challenge and this leads to a talent drain. Moreover, 39% find the lack of skilled professionals to be another challenge.
Bahrain faces a challenge resulting from the attractive compensation and benefits offered by neighboring countries, which hinders the recruitment process. Kuwait suffers from the challenges of laws to attract talent.
In the GCC, more than 75% of employees who completed their probation period were successfully hired, as reported by 56% of participants with the highest being in the UAE, reflecting a high success rate in the hiring process. However, Bahrain had the lowest hiring rate as reported by the participating organizations which signifies a need to work on talent acquisition and retainment.
KSA recorded the highest turnover cited at 14.1%, which might be attributed to various initiatives and mega-projects fueling economic growth and creating a vibrant market, such a dynamic environment encourages talents to move and seize better opportunities arising from the current transformation.
Talent management
The report highlights that talent management in the GCC is facing several shifts.
Promotions
According to the participating organizations, the GCC achieved a promotion rate of 57%, with KSA at the forefront in awarding the most promotions, closely followed by Qatar, while Oman provided the least promotions.
Compensation & benefits
77.6% of participating companies in the GCC countries have granted increments to their employees during 2023, with the most common “performance-related increase” at 46.7%, followed by “fixed rate increase” at 32.1%.
The average salary increment in the GCC countries in 2023 recorded 6.7% compared to 2022, which recorded 5.2% on average. This increase is due to several factors, including the strong performance of the labor market, which reached an unprecedented peak in the past decade, especially In KSA and UAE.
64% of the participants provided annual bonuses to their employees for 2023, reflecting an increase from 2022’s 62.7%. UAE is the highest country providing bonuses to attract and retain employees, followed by Saudia Arabia. Participating organizations in Bahrain offer the lowest bonuses.
Looking ahead at 2024, 83.3% of participating organizations in the GCC are planning to provide increments or bonuses, which is a way to acknowledge job performance and increase talent motivation. 47.6% of the participants will provide both a salary increment and a bonus in 2024, while 16.7% will not provide to their employees.
Impact of AI
According to the report, 60.8% of participating organizations that invested in AI in the GCC have anticipated benefits from implementing AI in 1-3 years. Furthermore, 31.3% report that they have already benefited from AI applications in their operations. UAE and KSA are already starting to notice the effects of AI as reported by participants.
According to the participating organizations, the areas of human resources that are most impacted by AI, are performance management and employee training and development, at 58.9% and 48.7%, respectively.
Challenges of AI adoption
52.5% of the participating organizations that started the adoption of AI are facing challenges related to the availability of skilled professionals. Additionally, 46.2% of organizations reported that developing complex, advanced technological infrastructures is a significant challenge.
41.1% of organizations in the GCC consider the lack of financial resources an additional challenge, which includes the investment needed to acquire the software and licenses, ongoing operational costs, and hiring skilled professionals.
Reflection from the CEO
Commenting on the report, Mohammed Abu Al-Rob, CEO of PROCAPITA and founder of ZENITHR, said: “Our annual HR Trends & Practices report has become an invaluable resource for companies navigating the evolving landscape of the labor market in the GCC countries, as it provides a comprehensive understanding of the economic developments and the resulting transformations concerning human resources and employment patterns in the GCC countries.”
“The report also provides a comprehensive analysis of the impact of artificial intelligence technologies on the operational processes in the organizations, as well as the compensation provided to members of the boards of directors of companies that offer their shares for public trading in the GCC countries.”
