Pickup in Gulf hiring expected in 2017 but salaries to remain stagnant

Hiring in the Gulf region is set to pickup this year following a challenging 2016 but there is expected to be little growth in salaries, according to a report by recruiting firm Hays.

In a fourth quarter survey of 2,700 working professionals and 250 employers in the GCC, the company found that 72 per cent of employers planned on recruiting additional staff in the next 12 months.

This compares to 37 per cent who said so the previous year.

More than a third of respondents (37 per cent) reported a reduction in headcount at their organisation in 2016, compared to 17 per cent in 2015 and 11 per cent who anticipated job reductions last year.

The number of redundancies also doubled in 2016, with 4 per cent of respondents indicating they had lost their job and 9 per cent of employees saying they had experienced a pay cut compared to 2 per cent the previous year.

For others there was a pay freeze with 52 per cent seeing no change in salary and only 7 per cent reporting an annual increase.

“Workforce salaries are one of the single biggest costs for employers, and, given the challenging economic climate of the past 12 months, it is simple not viable to offer company-wide pay rises. Instead, we have seen added focus to be on individual performance related pay, which typically amounts to a lower spend for employers than company-wide pay increases,” said Chris Greaves, managing director of Hays, Gulf Region.

Hays said salaries were expected to be remain flat this year, with 82 per cent of employers forecasting pay rates would either remain the same or increase by less than 5 per cent.

Despite this, Greaves said the firm was confident the market was improving as company restructuring and redundancies had already taken place.

“Many organisations are operating on minimum staff levels and are in a strong position to hire additional headcount in order to meet their 2017 business objectives.”

From job listings and offers data the company said there had been an uplift in demand so far this year compared to 2016, thanks particularly to new small and medium enterprise firms.

Cyber security professionals, online payment experts, C-suite executives and marketing content specialists are in particular demand, it added.

The findings of the report contrast with comments from Mahesh Shahdadpuri, CEO of TASC Outsourcing, who told Gulf Business last year that hiring activity would remain stagnant in 2017.

Read: Gulf hiring to remain stagnant in 2017