8 out of 10 GCC organizations to increase salary & benefits in 2024

More than 8 out of 10 organizations in the GCC are planning to increase the salary and financial benefits of their staff in 2024, according to a benchmark from Procapita Group.

In its HR Trends Report for 2024, which canvassed the views of leaders in over 1,200 organizations, Procapita Group found that 83% of organizations in the GCC are planning to provide increments or bonuses in the coming twelve months. Notably, nearly half of all organizations will provide both a salary rise and a bonus.

The outlook is more positive than what actually materialized last year. In 2023, 77% of organizations provided increments to their employees, with 22% abstaining from hikes in both salary or bonus.

How much salary employees can expect to add to their wallet this year is so far unknown, but the report suggests the trend will be in line with 2023. Last year, employers on average added 6.7% to the salary of staff, up from an average of 5.2% the year previous.

Lifting financial compensation for staff is a natural process tied to annual performance management cycles, and comes in recognition of the personal growth of people, company growth, as well as in response to inflation with employers keen on sustaining real wage growth.

Growth in financials is however more pronounced in the GCC compared to other markets, for a number of reasons according to the report, including stiff competition for talent, the growth environment in the GCC due to robust national economic performance. Growth is also more pronounced worldwide due to higher than average inflation rates.

There are all kinds of different ways how organizations can design and package their salary raises, with performance-based increases and fixed-percentage increases the most common. In light of high competition in the marketplace, nearly one third of organizations have a policy in place for industry standard matching, a process that adjusts salaries based on what is happening at industry peers.

In terms of bonuses, that number has edged upwards in recent years. In 2022, 63% of organizations provided annual bonuses to their employees, last year that number hit 64%.

Despite the prospect of higher personnel costs, 7 out of 10 organizations expected their employee growth rate to increase in 2024, with Saudi Arabia set to lead the talent hiring spree. “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,” said Mohammed Abu Al-Rob, CEO of Procapita Group.

Procapita Group is a pan-regional human consultancy firm specialized in human capital management. The firm is one of the leading companies in the segment.