4.6% salary hike expected in Oman next year, says survey

Date

9/5/2016 1:14:09 AM

(MENAFN- Muscat Daily) Muscat-

Oman-based companies have projected an average salary increase of 4.6 per cent for 2017 as per a GCC-wide survey of 600 multinational and local companies. Oman's outlook for 2017 shows a marked increase from 4.2 per cent increase noted in 2016. The largest study of its kind in the Gulf has forecast that salary earnings will increase an average of 4.7 per cent in 2017, demonstrating a more optimistic outlook across the board.

The same survey noted that this year the region saw an average salary increase of 4.3 per cent, which although positive, is down from an anticipated five per cent increase for the year.

According to the 'GCC Salary Increase Survey' conducted by Aon Hewitt, the global talent, retirement and health solutions business of Aon plc, salaries have been largely influenced by fluctuating oil prices and states' initiatives to diversify economies.

While 2016 proved to be a challenging period, over the next few years new policies governing inflation, taxation, diversification, and commodity pricing are expected to come into effect and lead to a general upswing in GCC salaries.

Moreover, the impact of lower oil prices and reduced public spending has not had the detrimental impact that some have anticipated, with most employers surveyed increasing the salaries this year and planning for even greater increases next year.

According to the International Monetary Fund, as governments cut back on subsidies, refocus spending on large mega-projects and with the announcement to introduce a region-wide VAT of five per cent in January 2018, the GDP growth is expected to climb in 2017 to 3.3 per cent - up from three per cent this year.

Among the participating GCC organisations, companies based in Saudi Arabia gave the highest projection for salary increases in 2017 at an average of 4.9 per cent compared to this year's actual 4.6 per cent hike.

For UAE, the 4.6 per cent increase for 2017 marks a slight increase from the 4.4 per cent average salaries growth seen in 2016.

Kuwait-based firms have estimated salaries to rise by 4.8 per cent in 2017, an increase from this year's 4.3 per cent although down from a 5.1 per cent increase in 2015.

Companies operating in Bahrain have registered the third-highest salary increase projection for 2017, reaching an average of 4.7 per cent. However, that falls just under the growth rate of 4.8 per cent for this year - the highest in the region for 2016.

Although companies in Qatar have again predicted the lowest increase in the Gulf at 4.5 per cent for 2017, the outlook is significantly higher than the recorded salary growth of just 3.6 per cent this year.

Robert Richter, GCC compensation survey manager, Aon Hewitt Middle East, said, 'Lower oil prices are likely to continue moderating the GCC's economic growth this year, but a refreshed focus on non-oil sectors along with sustained programmes of state investment should underpin GDP expansion into 2017. Of course, it is important to remember that HR salary projections are subject to change. However, the predictions for 2017 salary increases do fall in line with the general economic climate with signs of optimism on the horizon.'

The survey finds that actual salary increases for the 2016 have been the highest for pharmaceutical, media, and food/beverage/tobacco industries. The industries with the lowest salary increases for 2016 are telcos, construction and oil and gas, although salaries in each of these three sectors are expected to rebound year-on-year in 2017.

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