Just as the Gulf economies have undergone dramatic changes in recent months, including the introduction of value added tax and fee increases, we too felt it was time to shake up our annual Salary Survey.
While the format has served us well over the years, and offered a unique insight into the compensation expats could expect for a number of key roles, it was increasingly apparent that the included positions were not entirely reflective of the job market as we move towards the end of the decade.
In addition, a focus on largely management roles meant it offered less insight for the majority of the workforce, who are further down the ladder.
Our new streamlined Salary Survey for 2018 aims to address these issues in a simplified format that should prove relevant for the years to come as the gaps between Asian, Arabic and Western wages shrink.
Among the most noticeable changes has been the inclusion of the new lower tier positions such as human resources executive, logistics executive, sales executive and receptionist.
This meant that the overall average monthly salary this year of $8,083 is 26.3 per cent lower than that seen last year, with some quite substantial differences in some countries.
For example, the Saudi average was 34.21 per cent lower than the previous year.
In 2018, Saudi Arabia was found to be the highest paying country among the five Gulf Cooperation Council states covered with an average monthly salary of $8,560.
This was 2.9 per cent more than in the UAE, 8.4 per cent more than Bahrain, 8.7 per cent more than Oman and 8.96 per cent more than Kuwait.
Although this is not to say workers in the kingdom earn more in every single position with a number of exceptions ranging from construction managers, to head teachers, hotel managers and editors. The average salary for a head teacher in Kuwait, at $15,290, was 38 per cent higher than Saudi Arabia.
This year Saudi Arabia introduced a 5 per cent value added tax rate on most goods and services although this does not appear to have had a positive impact on salaries.
Michael Page Middle East managing director Leith Ramsay said firms have generally not factored the tax into pay rises.
“Most organisations did not factor in VAT into annual salary increases. The logic being the benefit of living with zero income tax is far greater than the introduction of VAT.”
Another consideration for workers has been a SAR100 ($27) monthly fee introduced last July for each of their dependents. The dependents fee is expected to increase to SAR200 ($53) in July this year.
Nadia director Ian Giulianotti said he believes the fee will not impact the country’s appeal for skilled workers, who are compensated with higher salaries in the kingdom than the other regional countries due to the greater restrictions they face there.
But there may be some impact on workers at the lower end of the market.
“There is a mind-set there that ‘I’m going to be there for three years, save everything I can and then in three years’ time I’m going to go home and buy a house or another financial goal’. That won’t change. It will still be that same pool of people that are going to go to Saudi Arabia,” he argued.
“The problems in Saudi Arabia are not at a skill-based level but a lower level – people that are mechanics, or working in restaurants and cafes. That’s where it’s going to be harder and harder to find people.”
Recent reports appear to support this theory with the number of foreign workers leaving the kingdom appearing to increase.
On the upside though, Michael Page’s Ramsay On the upside said the kingdom’s reforms, including plans to privatise state assets, attract foreign investment and diversify the economy, are creating opportunities in other areas.
“Saudi Arabia is going through a huge transformation and is driving a significant amount of the regional hiring,” he says.
Top salaries in Saudi Arabia
(All the amounts are monthly averages taken from data collated by three recruitment firms)
CEO/MD – Multinational: $38,325
CEO/MD – Local company: $27,100
Hotel general manager: $10,404
Head teacher/principal: $7,217
Real estate manager: $8,689
Construction project manager: $8,757
Human resources manager: $8,816
Recruitment manager: $8,373
IT manager: $8,500
PR account manager: $6,542
Sales/marketing manager: $6,112
Facilities management manager: $6,934
Healthcare general practitioner: $5,050
Office manager: $4,841
Digital marketing specialist: $4,414
Bank branch manager: $4,725
Sales executive: $4,420
Logistics executive: $3,045
Senior accountant: $3,766
HR executive: $3,457
Overall average: $8,560
The recruiters that participated in our survey continue to view the Gulf as an attractive place to work with average pay rises predictions across the region ranging from 2-3 per cent to 5 per cent this year.