employment & salary trends gcc 2012

7/30/2019 Employment & Salary Trends GCC 2012

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Introduction

Employment and job creation remain the hottest issues in the Middle East, including

in the six countries of the Gulf Cooperation Council (GCC).

This research report, produced by online recruiting firm GulfTalent.com, summarises

the status of the employment market and forecasts key trends to be expected during

2012.

Employment and Salary Trends in the Gulf is published annually since 2005 and is

the premier publication on employment trends in the Gulf region.

1

GulfTalent.com 2012. All rights reserved.


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Online Survey of

Employers

This report is based on in-depth research from a wide array of sources

Selection Criteria

Online Survey ofCandidates

Source

Interviews with TopManagers

Professionals employed by 3,000 largest corporations in the GCC

Aged 22-60 years

Earning an annual income in the range USD 12,000 - USD 200,000

Employing 50 to 20,000 staff

Across all major industries

Mix of private sector local and international companies

Across all major industries

Based in the 6 GCC countries

(Saudi Arabia, Qatar, Kuwait, Bahrain, Oman, UAE)

News & Research Relevant reports from the press and news sources across the region

Macro-economic sources

Research Methodology

Participants

35,000professionals

2,100Executives &HR Managers

60SeniorExecutives

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Economic & Political Background................................... 4

Nationalisation........................................................................... 9

Recruitment ..............................................................................13

Mobility.......................................................................................19

Salaries & Cost of Living........................................................... 25

2012 Forecast...........................................................................32

Appendix Useful Information..................................................37

Contents

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Economic & Political Background

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Gulf countries are experiencing high economic growth compared to the restof the world, thanks to high oil prices and government spending

Economic Growth2008-2012

0

20

40

60

80

100

120

2009 2010 2011 2012

Crude Oil PriceUSD per Barrel

Source: Economist Intelligence Unit Source: Dow Jones & Company

2008 2009 2010 2011 2012Forecast

5.2%

0.0%

4.2%

6.5%

4.7%

1.4%

-2.3%

4.1%2.7%

2.2%

GCC Economic Growth

World Economic Growth

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Gulf Economic Overview2011

Qatar

Oman

Saudi Arabia

Bahrain

UAE

Size of Economy ($bn)

588

67

163

358

26

GDP Growth

Kuwait

179

7.0%

4.7%

4.4%

3.3%

2.2%

17.6%

Source: Economist Intelligence Unit, GulfTalent.com Interviews

Key Factors Affecting Growth

High oil price, Huge government spending programme

Government spending, some limited unrest

High oil price, Government spending, US troopswithdrawal from Iraq

High oil price, Tourism boost following Arab spring, Dubaidebt restructuring, Financial sector weakness

Domestic unrest

Completion of gas projects, Government spending oninfrastructure, 2022 World Cup preparation

During 2011, Qatar and Saudi Arabia led economic growth in the Gulf, whileBahrain saw the regions lowest growth

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2011 was a year of political turmoil in the Arab world

UAE

Qatar

Bahrain

Saudi Arabi a

Syria

EgyptLibya

Tunisia

Yemen

Oman

I raq

KuwaitJordan

Lebanon

Revolution / Overthrow of Government

Public Demonstrations

On-going armed conflict

Arab World Key Popular Movements

2011

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GCC governments have undertaken massive wealth distribution measuresamong their citizens

Source: News reports

Pay Rise for Nationals in Public Sector2011

Qatar

Bahrain

UAE

Oman

Saudi Arabia

Kuwait

50-100Omani Rial per month

60-120%

35-100%

up to 37.5%

25%

15%

Other Government Measures 2011

Saudi Arabia $130bn subsidy programme SAR 2,000 per month unemployment benefit Minimum wage raised to SAR 3,000 Large scale housing programme

Oman

-50,000 new jobs in public sector

- Minimum wage increased to OMR 200- OMR 150 per month unemployment benefit

Bahrain- One-off grant of BHD 1,000 per family- Minimum wage increased to BHD 402

UAE- $2.7bn fund to provide loan assistance for low

income citizens

8

Kuwait

- One-off grant of KD 1,000 per citizen


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Nationalisation

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Job creation for citizens through nationalisation of expatriate jobs continuesto be a top priority for most GCC governments

Increase in Nationalisation% of companies reporting anincrease in their nationalisation rateduring 2011

Oman

Saudi Arabia

Kuwait

Bahrain

UAE

10%

20%

5%

7%

1%Qatar

14%82%

78%

54%

38%

28%

17%

Average Nationalisation Rate

Nationals employed in privatesector as % of total privatesector employment (2011)

Source: GulfTalent.com Survey of HR Managers, GCC Labour Ministries

Pressure on Employers% of employers reportingnationalisation as a key humanresource challenge

59%

17%

27%

17%

15%

36%

Overview of Nationalisation in Private Sector

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GCC governments have historically used a range of measures to increaseemployment of nationals in the private sector

Targets & Limits Support & Facilitation Incentives & Enforcement

Targets by sector (e.g. Banks, Oil

and Gas, etc.)

Targets by job functions (e.g. HR)

Employment fund (subsidising

wages of newly employed nationals)

Free training for nationals

Job centers putting unemployed

in touch with employers

Withholding visas for expat hires

Tax on employers for each

expatriate employee

Public praise / reprimand

GCC Nationalisation Common Government Strategies

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Source: Press reports, HR interviews


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More innovative approaches are being tried in some countries, introducingelements of choice, competition and commercial incentive

Companies within each sector are ranked by theirSaudization rate and grouped into 3 categories.

Companies in lowest ranks (red zone ) would face

difficulties in applying for new visas or even

renewing existing visas.

Companies in highest ranks (green zone) would be

able to hire expats from companies in the red zone

without acquiring no objection certificates (NOC).

Zone boundaries vary by industry, and are determined

based on the average of each peer group.

Companies are placed into one of 3 categories -according to their Emiratisation level, diversity of

nationalities and compliance with proposed minimum

wage levels.

Companies in lower categories pay significantly

higher government fees for their visa requirements.

Saudisation

(Nitaqat introduced June 2011)

Emiratisation

(Introduced December 2010)

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Recent Nationalisation Initiatives


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Recruitment

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Saudi Arabia leads job creation in the Gulf, while Bahrain lags the groupwith almost no expansion reported

Observations

Employment by Country

Net % of firms which increased headcount

UAE

Qatar

Kuwait

Bahrain

Saudi Arabia

Oman

Almost all Gulf countries had higher rates of job

creation compared to 2010.

Saudi Arabia had the highest rate of job creation

thanks to its strong economic growth and high

government spending.

Bahrain had almost no job creation in 2011

following severe political tensions in the country.

UAE had a significant rise in job creation, but it was

still much lower than most Gulf countries.

62%

56%

51%

51%

37%

8%

Source: GulfTalent.com Survey of HR Managers

2010

57%

25%

45%

22%

23%

2011

55%

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Dubais share of regional recruitment activity has started to increase aftertwo years of slowdown due to a combination of jobs growth and staffturnover

* Based on 68,000 vacancies advertised by employers and recruitment agencies on GulfTalent.com website over the specified periodNote: Internet penetration and prevalence of online recruitment varies across the countries

Source: GulfTalent.com

Recruitment Volume by Location% of vacancies advertised on GulfTalent.com *

31%

22%

20%

16%

4%4%3%

2010

37%

18%

18%

17%

4%3%3%

2011

31%

21%

20%

14%

6%

4%4%

2009

48%

13%

14%

8%

9%

6%2%

2008

Oman

UAE(excluding Dubai)

Dubai

Saudi Arabia

Qatar

Kuwait

Bahrain

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Oil & gas, healthcare and retail sectors are enjoying the largest headcountexpansion, while banking and construction fare the worst

ObservationsEmployment by Sector

Net % of firms which increased headcount in 2011

Oil & Gas had the highest rate of employment due to

expansion plans following two years of high oil price.

Healthcare also had high employment for a second year

mainly due to continued government investment.

Retail continued to enjoy high growth on the back of higher

consumer spending and net disposable income.

Banking had one of the lowest growth rates, with some

banks announcing fresh rounds of redundancies, following

increased worries about the Euro crisis.

Construction continued to have a low employment growthrate due to completion of old projects and lack of new ones.

Healthcare

Telecoms/IT

Engineering

Transport & Logistics

Retail

Construction

Oil & Gas

Real Estate

Travel & Hospitality

Banking

63%

61%

60%

50%

46%

43%

41%

33%

28%

27%


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With Western countries facing high unemployment and low pay rises, Gulfemployers are finding hiring Western nationals easier than Asian candidates

Unemployment Rate in Western Countries2008-2012

Private Sector Pay Increase Global Comparison% 2011

3%

4%

5%

6%

7%

8%

9%

10%

11%

2008 2009 2010 2011

Australia

Canada

UK

France

12.6%

6.7%

5.5%

4.4%

3.1%

2.7%

2.7%

Australia

Canada

Philippines

India

GCC

UK

US

Source: Economist Intelligence Unit Source: Aon Hewitt, Hay Group, GulfTalent.com

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The popular uprisings across the wider Middle East have had a mixedimpact on attraction and retention of talent in the Gulf

Employment

of Nationals

Expatriate

Employment

Key Trends

Nationalisation targets: Government pressure on private sector to hire more

nationals has intensified.

Competition for nationals: Pay hikes awarded by governments to public

sector employees, which were partly prompted by the Arab Spring, has made it

harder for the private sector to attract nationals.

Availability of Arab expats: More Arab expatriates are available from

countries which experienced political turmoil.

Visa restrictions: Some Gulf governments have made it more difficult to apply

for employment visas for expats from troubled countries.

Western expats: Some employers are finding it difficult to attract Western

candidates, as they perceive the region to be unsafe following the press

coverage of the Arab spring.

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Impact of Arab Spring on Gulf Employment


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Mobility

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The UAE and Qatar remain prime destinations for expatriates, with SaudiArabia in third place

ObservationsAttraction of Expatriates

% of GCC-based expats outside the country who wish torelocate into it

0%

10%

20%

30%

40%

50%

60%

70%

2008 2009 2010 2011

Saudi Arabia

Qatar

Bahrain

UAE

KuwaitOman

Source: GulfTalent.com Surveys

UAE has strengthened its position as the most

popular destination among Gulf-based expatriates.

Qatar, which was rapidly closing the attraction gap

with the UAE, remains in second place and has lost

some momentum, as sentiments about the UAEeconomy becomes more positive.

Saudi Arabia remains in third place, with its

attractiveness stable, following a sharp rise in

popularity at the onset of the crisis.

Bahrain dropped from fourth place to the bottom,

becoming the Gulfs least attractive destination forexpatriates, following political tensions in the country.

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Ranking of Gulf Cities By Attractiveness to Expatriates% of GCC-based expats outside the city who wish to relocate into it

Source: GulfTalent.com Survey

Overall

Abu Dhabi

Dubai

Doha

Jeddah

Kuwait

Riyadh

Muscat

Sharjah

Manama

Dammam

Madina

Makkah

WesternExpats

AsianExpats

ArabExpats

37%

22%

20%

7%

4%

3%

3%

3%

3%

2%

2%

2%

26%

46%

21%

3%

1%

2%

8%

1%

3%

0%

1%

0%

20%

35%

20%

7%

4%

3%

4%

2%

2%

2%

3%

3%

17%

38%

25%

9%

3%

3%

2%

1%

1%

1%

3%

2%

Dubai remains by far the regions most attractive city for expatriates

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In terms of attractiveness to expatriates living within the country, the UAEonce again retains the lead position

UAE

Saudi Arabia

Kuwait

Oman

Bahrain

2011

59%

50%

51%

50%

50%

2012

Qatar

72%

Observations

UAEs already high retention rate has increased further,

due to a rebound in business confidence, declining rents

and the countrys high level of political stability.

Kuwait benefits from the long-term nature of its

expatriate population, with social and family ties formed

over the years discouraging expats from leaving the

country.

Qatars retention rate remains significantly lower than

UAE mainly because of laws preventing expatriates from

changing jobs.

Bahrains retention rate has dropped for a second year,

following political tensions and slow economic growth in

the country.

Retention of Expatriates% of expats within the country who wish to remain there


81%

64%

49%

49%

46%

45%

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Abu Dhabi continues to serve as an employment hub for a portion of Dubairesidents, while Bahrains role as a base for working in Saudi has taken a hit

Dubai-residents working in Abu Dhabi

As % of all working professionals living inDubai

1.1% 1.1%

3.4%

5.4% 5.4%

1.0% 0.9%1.1%

2.2%

1.3%


Bahrain-residents working in Saudi Arabia

As % of all working professionals living inBahrain

23

2008 2009 2010 20112007 2008 2009 2010 20112007


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Governments across the Gulf are continuing to encourage labour mobilitywithin their countries, through easing NOC requirements *

Recent DevelopmentsLabour MobilityCountry

Qatar

Saudi Arabia

Kuwait

UAE

Bahrain

Oman

NOC not required if previous employer below

required nationalisation targets (June 2011)

New sponsorship system plans to remove NOC

requirement altogether, but not implemented yet

NOC not required after completing 2 years

(Jan. 2011). Already removed fully for free zones.

* No Objection Certificate issued to expatriate employees by their employer, giving consent to the expatriate being hired by another firm

NOC requirement abolished in 2009

NOC requirement abolished in 2007

Most strict in the Gulf. NOC fully enforced. No

indication of an imminent easing.

Source: Press reports, HR interviews

Guide to chart

Full labour mobility

(NOC not required)

No labour mobility

(NOC fully enforced)

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Domestic Labour Mobility


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Salaries & Cost of Living

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Average private sector salary increase in the Gulf has remained stable, butmuch lower than pre-recession levels.

GCC Average Salary Increase%, 2007- 2012

9.0%

11.4%

6.2% 6.1%5.5% 5.6%

2008 2009 2010 20112007 2012

Forecast


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6.5%

6.0%

5.6%

5.1%

4.9%

4.5%

During 2011, Oman enjoyed the highest average increase in pay, followed bySaudi Arabia and Qatar

Observations

Oman had the highest salary increase in the Gulf, in

part driven by widespread strikes by Omani

employees and the pay hike awarded in the public

sector.

Saudi Arabia and Qatar continued to have high

salary increases on the back of strong economic

developments.

Bahrain had the lowest salary increase due to lower

economic growth following the political unrest.

Qatar

Oman

Saudi Arabia

Bahrain

UAE

2010

6.7%

6.8%

5.7%

5.2%

4.9%

2011

Kuwait

6.4%


Private Sector Salary Increase by Country

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4.9%

4.0%

3.7%

2.5%

1.0%

0.4%

Average pay rise net of inflation, was highest in the UAE and Bahrain

Observations

Despite having the lowest salary increases in the

Gulf, Bahrain and UAE enjoyed the highest

increases in real terms due to very low inflation

rates.

Saudi Arabia and Kuwait had the lowest salary

increases in the Gulf in real terms, due to

relatively high inflation.

Qatar

Bahrain

UAE

Saudi Arabia

Kuwait

Salary Rise

4.9%

5.6%

6.5%

6.0%

5.1%

Real Salary Increase by Country *

Oman

4.5%

Inflation

0.9%

1.9%

4.0%

5.0%

4.7%

-0.4%

* Defined as nominal pay rise net of inflation rateSource: GulfTalent.com Survey, Economist Intelligence Unit

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HR professionals enjoyed the highest pay rise, while Administration andMarketing had the lowest

Observations

HR had the highest salary increase for a second year,

reflecting the rising profile and growing sophistication

of the HR role, as well as leaner HR operations

supported by fewer staff following the crisis.

IT had one of the highest increases last year, due to

global shortage and on-going demand for IT

professionals.

Admin candidates continued to have one of the

lowest increases, as companies continue to automate

processes and seek staffing efficiencies.

Finance

HR

IT

Admin

Engineering

Sales

Marketing

6.4%

6.3%

5.5%

5.3%

5.3%

4.9%

4.6%


Salary Increase by Job Category

%, 2011

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Among sectors, Healthcare and Retail offered the highest pay rises, whileReal Estate had the lowest

Healthcare had the highest salary increase, due to

increased investments by GCC governments, specifically

Saudi Arabia.

Retail sector continued to have high salary increase in

line with strong growth in the sector, generated by high

consumer spending.

Banking sector continued to suffer for a third year,

following a slow rate of recovery and fresh rounds of

redundancies on the back of the European debt crisis.


Healthcare

Oil & Gas

Retail & FMCG

Telecoms & IT

Engineering

Construction

Travel & Hospitality


Education

Banking

Real Estate

6.4%

6.2%

5.7%

5.7%

5.6%

5.4%

5.1%

5.0%

4.6%

4.5%

4.3%

ObservationsSalary Increase by Industry%, 2011

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Rent for Two-bedroom Apartment

US$ per month, 2012*

Inflation

%

Abu Dhabi

Dubai

Doha

Sharjah

Muscat

Manama

Kuwait

Jubail

Riyadh

Jeddah

Dammam

Khobar

* Average figure. Wide variations based on location and qualitySource: GulfTalent.com Survey

Source: Economist Intelligence Unit

Qatar

Bahrain

UAE

Saudi Arabia

Kuwait

2011

Oman

2010

3.2%

4.0%

-2.4%

0.9%

2.0%

5.4%5.0%

4.7%

4.0%

1.9%

0.9%

-0.4%

1,930

1,650

1,590

1,000

960

910

840

710

670

670

670

550

Cost of living has continued to rise in Saudi Arabia, Kuwait and Oman. Inabsolute terms, however, it remains low compared to UAE and Qatar

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2012 Forecast

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Observations20112012

Expected Average Pay Rise

%, 2012 Forecast


Gulf salary rises during 2012 are expected to be broadly in line with 2011

Gulf employers generally expect similar salary

increases in 2012 compared to the previous year

Qatar and Saudi Arabia are expected to have the

highest increase in the Gulf and slightly higher than

their 2011 levels, as companies expand to capitalise

on the two countries strong economic growth

Bahrain is once again expected to have the regions

lowest salary increase in 2012 due to a stagnant

economy following domestic unrest in 2011.

Oman

Saudi Arabia

Kuwait

Bahrain

UAE

Qatar

5.1%

6.5%

5.6%

4.9%

4.5%

6.0%

6.4%

6.2%

5.6%

5.1%

4.9%

4.5%

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Job creation is expected to be moderately higher in 2012, with Saudi Arabiacontinuing to lead

All Gulf economies are expected to have higher rates

of job creation in 2012 compared to the previous

year.

Saudi Arabia is expected to continue to have thehighest rate of job creation in the Gulf, thanks to high

economic growth and government spending.

Bahrain is expected to rebound partially from a

stagnant job market in 2011, but will continue to have

the regions lowest rate of job creation.

Oman

Kuwait

Bahrain

UAE

Qatar

77%

73%

68%

65%

51%

42%


Employment Growth by CountryNet % of firms increasing headcounts

Observations20112012

56%

51%

51%

37%

8%

62%Saudi Arabia

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Oil & gas, retail and healthcare will continue to dominate jobs growth, whilebanking and construction continue to have the lowest growth rates

Observations

Oil & Gas is expected to have the highest expansion

in 2012 due to new projects in the sector.

Retail is expected to continue growing at a high rate

due to higher net disposable income and consumer

spending.

Banking is expected to have the lowest rate of job

creation in 2012, due to continuing credit concerns

and the Euro-zone financial crisis

Healthcare

20112012

63%Oil & Gas

60%Retail

61%

Telecoms & IT 50%

Engineering

41%

Construction

43%Travel & Hospitality

46%


33%

Banking

27%

Real Estate

28%

73%

72%

65%

63%

62%

62%

58%

57%

48%

46%


Employment Growth by Sector

Net % of firms increasing headcounts

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Source: Economist Intelligent Unit, GulfTalent.com Interviews

A number of external uncertainties can impact the Gulf economy and labourmarket during 2012

Political & Economic Uncertainties

Political Factors

Arab spring: Significant uncertainty remains over the

outcome of the conflict in Syria, the kind of

governments which are likely to emerge in place of

those that have fallen, and the extent to which

developments in the wider Arab world will impact Gulf

countries.

Iran tensions: A possible military conflict with Iran

could have unpredictable consequences for the entire

Middle East region including Gulf countries.

Economic Factors

European debt crisis: Continuing bad news in

Europe, including the possibility of a sovereign default,

could lead to another global recession impacting Gulf

countries, particularly the UAE which is more exposed

to global trade and tourism.

US Dollar: Given the Gulf countries peg to the US

Dollar, any significant fluctuations in the value of the US

Dollar against other currencies could impact Gulf

employers ability to attract and retain expatriates

particularly from major source countries such as India.

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Appendix Useful Information

37


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Useful Information

ForecastSource: Economist Intelligence Unit, GulfTalent.com Surveys

Country 2010 2011 2012 F

Bahrain 4.9% 4.5% 4.5%

Kuwait 5.7% 5.1% 4.9%

Oman 6.4% 6.5% 5.6%

Qatar 6.8% 5.6% 6.4%

Saudi Arabia 6.7% 6.0% 6.2%

UAE 5.2% 4.9% 5.1%

Salary Rise by Country% Rise in Base Salary

Country 2010 2011 2012 F

Bahrain 2.0% -0.4% 2.2%

Kuwait 4.0% 4.7% 4.4%

Oman 3.2% 4.0% 3.7%

Qatar -2.4% 1.9% 2.1%


UAE 0.9% 0.9% 2.1%

Inflation

Country 2010 2011 2012 F

Bahrain 4.5% 2.2% 3.1%

Kuwait 3.1% 4.4% 5.4%

Oman 5.0% 4.7% 4.5%

Qatar 14.0% 17.6% 7.6%


UAE 1.4% 3.3% 3.5%

Economic Growth% Real GDP Change

Country 2012

Bahrain 1.3

Kuwait 3.9

Oman 3.4

Qatar 1.8

Saudi Arabia 28.9

UAE 7.5

Population (millions)

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employment & salary trends gcc 2012

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