webinar: latest pay trends in the gcc

Latest Pay Movement And Trends In UAE And GCC

Wednesday, 10 February 2016 16:30 – 17:30 (UAE-Time)

THE WEBINAR WILL START SHORTLY

Megha Bhatia (Informa) Robert Mosley (Lemon Pip Consulting)

About the HR Observer

• The HR Observer is an initiative by Informa Middle East aimed at becoming a platform for HR professionals in the Middle East to exchange insights and expertise, both online and offline, in an effort to take the HR industry forward in the GCC region.

• The initiative features a blog, LinkedIn group, Twitter feed, online webinars and a series of offline informal networking functions.

Housekeeping

• Please wait until the end of the session to type questions

• Time will be allocated at the end to address questions

• Slides will be available on our SlideShare page for the next four weeks, and the link will be emailed to you

• Recording of the webinar will be available for the next four weeks, and the link will be emailed to you

• Please complete the post-webinar survey

Today’s Presenter

Robert Mosley is one of the leading global experts on compensation and benefits in all sectors across the GCC. He was head of the Middle East practice with Hay Group in 1987-1990 before joining the Emirates Group to later become the SVP Human Resources. He spent 13 years based in Dubai at Emirates Group, before starting his own compensation consulting business, Lemon Pip Consulting, where he is working with over 400 companies in the Middle East and 80 airlines globally.

Pay Trends in UAE and GCC

Presentation Facilitator: Robert Mosley

Location: Webinar by Informa

Presentation Title: Pay Trends in UAE and GCC

Contact Email: robert@lemon-pip.com

Presentation Date: 16:30 (UAE) on Wednesday 10th February 2016

Robert Mosley: • 1980-1983: MA in Mathematics at Oxford University • 1983-1985: MBA in Business Studies at London Business and Chicago Business School • 1985-1990: Hay Group Management Consultants (UK and UAE) • 1990-2003: Emirates Airline Group in UAE (Senior Vice President Human Resources) • 2003-2005: Qatar Airways in Qatar (Group General Manager Human Resources) • 2007-2009: Travelport-Galileo in UK (Group Vice President Global Reward)

• 2003-: Fellow of the Chartered Institute of Personnel and Development (FCIPD) • 2005-: CEO of Lemon Pip Consulting (Reward and HR Consulting in GCC) • 2015-: Master Trainer for CIPD and Member of “CIPD Reward Advisory Board” Lemon Pip Consulting Limited: Specialism: Reward Consulting and Training Courses in Total Reward Management Main Services: Grading, Compensation, Performance Management, Pay for Performance GCC Clients: Over 400 clients globally (mainly in the Middle East and Asia) Email: robert@lemon-pip.com

Your Seminar Leader: Robert Mosley

Pay Trends in UAE and GCC

(1) Introduction

(2) Understanding Definitions

(3) Trends in Basic Salary

(4) Trends in Allowances

(5) Trends in Bonuses

(6) Trends in Benefits

(7) Forecast for Next Year

(8) Q&A Session and Discussion

JOB

PERFORMANCE

MARKET PERSON

$

OD JOB DESC

JE

GRADES KRAs

KPIs

GOALS OBJECTIVES

BEHAVIOURS COMPETENCIES

APPRAISALS

PAY-REVIEW & BONUS

PAY STRATEGY

PAY SURVEYS

BENCHMARK

PAY RANGES & ALLOWs

JE JA

RATINGS

(1.1) Introduction: Managing Remuneration

(1.2) Introduction: Setting The Scene

Oil Price Significantly Down

Inflation Up (3.0% in UAE)

GDP Growth Slowing But Still Good (up 3.2% in UAE)

Increased Attrition/Turnover (up from 8% to 10%)

(1.3) Introduction: Setting The Scene

(1.4) Introduction: Role of Compensation

The Role of Cash in Attracting Talent is Changing:

… Especially For Younger Generations:

(1.5) Introduction: Role of Compensation

Pay Trends in UAE and GCC

(1) Introduction

(2) Understanding Definitions

(3) Trends in Basic Salary

(4) Trends in Allowances

(5) Trends in Bonuses

(6) Trends in Benefits

(7) Forecast for Next Year

(8) Q&A Session and Discussion

(2.1) Understanding Definitions

The Seven Levels of Definitions:

• Basic Salary: Monthly Salary x12

• Base Salary: Basic plus 13th Month

• Guaranteed Fixed Cash: Base plus Allowances

• Total Cash Earnings: Guaranteed Cash plus Bonuses

• Total Remuneration: Total Cash plus Benefits

• Total Reward: Total Remuneration plus T&Cs

• Total Cost of Employment: Total Reward plus Govt Costs

Our Focus Today:

Annual Basic Salary = Monthly Basic Salary x 12 Months

Guaranteed Fixed Cash = Basic plus Allowances (Housing, Transport)

Total Cash Earnings = Guaranteed Cash plus Variable Bonuses

Total Remuneration = Total Cash plus Benefits

(2.2) Understanding Definitions

Pay Trends in UAE and GCC

(1) Introduction

(2) Understanding Definitions

(3) Trends in Basic Salary

(4) Trends in Allowances

(5) Trends in Bonuses

(6) Trends in Benefits

(7) Forecast for Next Year

(8) Q&A Session and Discussion

FORECAST FROM

LAST YEAR:

Forecast for 2014-2015 was about 5.0%

(3.1) Trends in Basic Salary

THE HEADLINE FIGURE FOR UAE:

4.0%

But What Does This Mean ?

• General Increase and Movement in “Market”?

• Merit Increase and Movement Through Range ?

(3.2) Trends in Basic Salary

THE HEADLINE FIGURE FOR UAE:

4.0%

Is It Stable at All Job Levels and Grades ?

• Differentials Almost Reversed:

4.2% to 4.7% Senior Management

3.0% to 3.5% Management

3.4% to 3.9% Professional and Supervisory

4.5% to 5.0% Clerical and Manual

(3.3) Trends in Basic Salary: Differentials

THE HEADLINE FIGURE FOR UAE:

4.0%

Is It Similar In All Sectors ?

5.5% to 6.0% Retail and Automotive

4.7% to 5.2% Banks and Financial Services

4.3% to 4.8% Real Estate and Insurance and F&B

3.5% to 4.0% FMCG and Technology and Pharma

2.8% to 3.3% Construction and Hotels-Hospitality

2.5% to 3.0% Local Family Conglomerates

2.2% to 2.7% Oil and Gas and Healthcare

(3.4) Trends in Basic Salary: Sectors

Upper-Decile (P90): Oil and Gas Investment Banking and Asset Management Chemicals and PetroChem Financial Services Upper Quartile (P75): Retail Banking Technology and IT Telecommunications Government Sector (GCC) Pharmaceuticals Insurance Real Estate FMCG Retail Media and Marketing Business Services Median (P50): Engineering Aviation and Airlines Automotive Construction Education (Tertiary) Healthcare and Medical Services Cargo and Logistics Lower Quartile (P25): Travel and Tourism Hotels and Hospitality Utilities Education (Primary and Secondary) Lower Decile (P10): Heavy Manufacturing

(3.5) Trends in Basic Salary: Sectors

Method of Review: 1995: 2015:

• Fixed Increments 75% 9%

• Partial Fixed and Some Merit 20% 13%

• Purely Merit 5% 78%

(3.6) Trends in Basic Salary: Merit Pay

Method of Treatment: 1995: 2015:

• Maximum-means-Maximum 80% 11%

• Allow to go above Maximum

with “Personal differential” 10% 10%

• Lump-Sum Merit-Bonus

Instead of Merit-Pay 10% 79%

(3.7) Trends in Basic Salary: Reaching Maximum

Pay Trends in UAE and GCC

(1) Introduction

(2) Understanding Definitions

(3) Trends in Basic Salary

(4) Trends in Allowances

(5) Trends in Bonuses

(6) Trends in Benefits

(7) Forecast for Next Year

(8) Q&A Session and Discussion

ALLOWANCES HAVE ONLY SLIGHTLY INCREASED:

Basic Salary was 4.0%

Guaranteed Fixed Cash was 3.5%

Implication is: Allowances Increased by only 3.0%

Main Increase was Housing Allowances in Early 2015

When Housing Allowances were increasing by 6%-8%

BUT housing rental costs have dropped 8% in Late 2015

(4.1) Trends in Allowances

ALLOWANCES ONLY INCREASED IN “MID-LEVELS”:

Basic Salary was 4.0%

Guaranteed Fixed Cash was 3.5%

(4.2) Trends in Allowances

(4.3) Trends in Allowances: Housing

(4.4) Trends in Guaranteed Fixed Cash

OTHER TRENDS:

• GAP BETWEEN NATIONALS AND INPATS IS RISING:

- Typically 40%-60% Higher on Guaranteed Cash

- Minumum Gap of AED 2,500 pm at Low-Levels

- Maximum Gap Capped at about AED 9,000 pm

• GAP BETWEEN ABU DHABI AND DUBAI IS FALLING:

- Now only About 16%-20% on Guaranteed Cash

- Mainly Due to Higher Housing Allowances

(4.5) Other Trends in Guaranteed Fixed Cash

(4.6) Other Trends in Guaranteed Fixed Cash

Pay Trends in UAE and GCC

(1) Introduction

(2) Understanding Definitions

(3) Trends in Basic Salary

(4) Trends in Allowances

(5) Trends in Bonuses

(6) Trends in Benefits

(7) Forecast for Next Year

(8) Q&A Session and Discussion

BONUS PAYMENTS WERE JUST BELOW TARGET IN 2015:

Basic Salary was 4.0%

Guaranteed Fixed Cash was 3.5%

Total Cash Earnings was 3.5%

Implication is: Bonus Payments were Just Below-Target

Actual Bonus Payments in Early-2015 Were About 5% Below Target and About 10% Worse Than Early-2014

(5.1) Trends in Bonuses

(5.2) Trends in Bonuses

(5.3) Trends in Bonuses

(5.4) Trends in Total Cash Earnings

Pay Trends in UAE and GCC

(1) Introduction

(2) Understanding Definitions

(3) Trends in Basic Salary

(4) Trends in Allowances

(5) Trends in Bonuses

(6) Trends in Benefits

(7) Forecast for Next Year

(8) Q&A Session and Discussion

BENEFIT COST INCREASES WERE HIGHER IN 2015:

Basic Salary was 4.0%

Guaranteed Fixed Cash was 3.5%

Total Cash Earnings was 3.5%

Total Remuneration was 3.8%

Implication is: Benefits Costs Rose by 6%-8%

Average Education School Fees up by 4%-6%

Average Medical Insurance Costs up by 7%-9%

(6.1) Trends in Benefits

• LIMITS ARE NOT KEEPING PACE WITH ACTUALS

• REIMBURSEMENT NOW AVERAGES 70%-75%

• OFTEN NOW CALLED “SUBSIDY”

(6.2) Trends in Benefits: Education

(6.3) Trends in Benefits

(6.4) Other Trends in Benefits

• First Major Concern is Healthcare Costs

• Second Major Concern is Education Costs

• Very Few Companies have “Flexible-Benefits”

• Provident Schemes are Not Increasing

• Outsourcing of EOSB Gratuity is Not Increasing

Pay Trends in UAE and GCC

(1) Introduction

(2) Understanding Definitions

(3) Trends in Basic Salary

(4) Trends in Allowances

(5) Trends in Bonuses

(6) Trends in Benefits

(7) Forecast for Next Year

(8) Q&A Session and Discussion

FORECAST FOR

NEXT YEAR:

Forecast for 2015-2016 is back to 5.0%

(7.1) Forecast for Next Year

(7.2) Forecast for Next Year: Are We Realistic ?

Pay Trends in UAE and GCC

(1) Introduction

(2) Understanding Definitions

(3) Trends in Basic Salary

(4) Trends in Allowances

(5) Trends in Bonuses

(6) Trends in Benefits

(7) Forecast for Next Year

(8) Q&A Session and Discussion

(8.1) Future Training Events

Please contact Informa about future training events and courses in Dubai with Robert Mosley: Certificate In Compensation And Reward Management 03-Apr-16 07-Apr-16 Dubai

Certificate In HR Policies And Procedures 10-Apr-16 13-Apr-16 Dubai

Certificate In Advanced Compensation and Total Remuneration 17-Apr-16 21-Apr-16 Dubai

Certificate In Managing Pay for Employees 24-Apr-16 26-Apr-16 Dubai (New)

Certificate In Managing Pay and Incentives for The Sales Force 27-Apr-16 28-Apr-16 Dubai (New)

Certificate In Job Descriptions and Job Evaluation And Grades 15-May-16 19-May-16 Dubai

Certificate In Performance Management And Performance Appraisals 22-May-16 26-May-16 Dubai

20th

Annual Informa C&B Forum 29-May-16 02-Jun-16 Dubai

Responsibilities of The Board and RemCo on Managing Pay 12-Oct-16 13-Oct-16 Dubai (New)

Certificate In Job Descriptions, Job Evaluation And Grades 16-Oct-16 20-Oct-16 Dubai

Certificate In Compensation And Reward Management 23-Oct-16 27-Oct-16 Dubai

Certificate In Performance Management And Performance Appraisals 30-Oct-16 03-Nov-16 Dubai

Certificate In Advanced Compensation And Total Remuneration 06-Nov-16 10-Nov-16 Dubai

Certificate In HR Policies And Procedures 13-Nov-16 16-Nov-16 Dubai

Certificate In Nationalisation Strategies 20-Nov-16 23-Nov-16 Abu Dhabi

(8.2) Any Questions ?

Any Questions ?

Or contact me for future consulting support:

robert@lemon-pip.com

Pay Trends in UAE and GCC

Presentation Facilitator: Robert Mosley

Location: Webinar by Informa

Presentation Title: Pay Trends in UAE and GCC

Contact Email: robert@lemon-pip.com

Presentation Date: 16:30 (UAE) on Wednesday 10th February 2016