Last year the Gulf Business salary survey was a source of controversy when we revealed Western expatriates earn a significant amount (14.5 per cent in fact) more than their Arab colleagues. Equally an Asian professional was found to earn 29.6 per cent less than a Westerner, doing the exact same job.
Clearly we did not expect the wage gap to be resolved in a year but we did see firm indications in our survey that it was decreasing. This was most noticeable between Western and Arab salaries where on average the latter was found to earn only 2.38 per cent less. While the difference between Western and Asian professionals had also shrunk, with the latter on average earning 27 per cent less.
“Gradually those gaps will narrow and narrow,” said Ian Giulianotti, associate director HRM Consulting, Nadia. ”We’re not going to see it in a year or five years. I think it’s probably going to take about 10 or 15 years but those gaps will narrow to the point where we won’t have this differentiation, from middle management upwards.”
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AVERAGE SALARIES SLIDE
Saudi Arabia and Qatar maintained their positions as highest and second highest paying nations in this year’s survey, but there was a less anticipated overall decline in average salary.
The total average wage of an expatriate dropped just over two per cent compared to 2013, from $10,611 a month to $10,392 a month, as a result of lower average Western and Asian salaries.
“Companies remain very focused on ensuring that their cost structures are under control and we are in fact still seeing companies engaging in restructuring and outsourcing in order to further reduce overheads,” noted Cliff Single, commercial manager at BAC ME.
Gareth Clayton, director of financial and professional services at Charterhouse Middle East, pointed to past wage trends as influencing current cost concerns. “Whilst demand drives a market upturn, talent supply remains relatively buoyant and strong. Employers continue to have cost at the forefront of their mind linking back to the previous overheated market and wage trend.”
PAY DAY ON THE HORIZON?
The big question for salaries in 2014 is whether companies will continue to maintain current salary levels, or whether improving sentiment will translate into a more competitive market for talent, according to BAC’s Single.
“Our expectation is that 2014 will continue to see only gradual salary growth; however, if international and regional economic trends stay positive, we may see a tipping point in the next year with companies needing to bid up salaries as they try to attract new talent.”
The survey was compiled based on inputs provided by four regional recruitment companies including Nadia, BAC Middle East, Adecco Middle East and Charterhouse.