(MENAFN- Mid-East) Jeddah:
Today, PROCAPITA, a leading HR consultancy firm in the region, has officially released
its second annual report for the Gulf Cooperation Council countries (GCC) for the year
2023/2024. The report conducts a thorough analysis of the labor market in the region,
shedding light on the latest developments and trends in the field of human resources. It
covers essential aspects, including economic highlights, recruitment & manpower
planning, technology, talent management, compensation and benefits, and board
remunerations.
To provide valuable insights, PROCAPITA executed a meticulously designed survey,
involving over 1,200 organizations from various sectors in the GCC. Their active
participation significantly contributed to enriching the depth and accuracy of the findings
presented in the report.
Commenting on the report, Mr. Mohammed Abu Al-Rob, CEO of PROCAPITA and
founder of ZENITHR, stressed the importance of this annual report, which has become
an invaluable resource for companies navigating the evolving landscape of the labor
market in the GCC countries, as it provides a comprehensive understanding of the
economic developments and the resulting transformations concerning human resources
and employment patterns in the GCC countries. It also provides a comprehensive
analysis of the impact of artificial intelligence technologies on the operational processes
in the organizations, as well as the compensation provided to members of the boards of
directors of companies that offer their shares for public trading in the GCC countries.
Abu Al-Rob also highlighted the effective role of PROCAPITA's strategic partners,
ZENITHR for HR Intelligence Solutions and Thomas International, which specializes in
conducting behavioral and professional assessments of employees. Their expertise has
expanded and deepened the understanding of various precise aspects related to talent
dynamics in organizations and industries across the region. Furthermore, this
collaboration embodies a steadfast commitment to providing the best value to all
partners. He noted that the increase in the number of participants reflects a deep
confidence in the team's efforts to understand the dynamic landscape of human
resources in the Gulf Cooperation Council region.
Key Findings of the Report:
Recruitment & Manpower Planning:
Employment Growth Rate:
Employee growth rate remained positive in the GCC, with 66.7% of the participating
organizations citing increases in 2023. The highest growth rate was recorded in KSA,
which could be attributed to various labor reforms, including private sector investment
and entrepreneurship initiatives, boosting the Saudi talent market forward. On the other
hand, organizations in Qatar cited a low employee growth rate in 2023 potentially due to
the
completion of the 2022 FIFA World Cup, which reduced the
demand for talent.
70.1% of participating organizations in the GCC expect the employee growth rate to
increase in 2024. Organizations in KSA have the highest expectation of growth
potentially due to investment in various mega projects to boost tourism and the hiring for
mega-projects such as NEOM. The outlook for the GCC is promising, as organizations
anticipate favorable advancements that will lead to economic growth and progress.
Causes of Employees Quitting:
In the GCC, 64.6% of the organizations identified the prospect of new job opportunities
as the main reason to quit their positions. Participating organizations in UAE, are the
highest to cite such reason, which could be related to the“Green Visa” initiative.
Moreover, compensation and benefits stand as the second reason at 43% for talent
quitting their jobs, compared to last year when compensation was the main reason at
71.5% according to PROCAPITA's 2022 annual report*. This shift indicates a change in
the talent hiring trends, suggesting new attractive career opportunities for skilled
professionals.
Recruitment Challenges:
43.3% of participating organizations perceive competitive compensation offered by the
neighboring markets to be a challenge and this leads to 'talent drain. Moreover, 39%
find the lack of skilled professionals to be another challenge. Bahrain faces a challenge
resulting from the attractive compensation and benefits offered by neighboring
countries, which hinders the recruitment process. Kuwait suffers from the challenges of
laws to attract talent.
New Hires Success Rate
In the GCC, more than 75% of employees who completed their probation period were
successfully hired, as reported by 56% of participants with the highest being in the UAE,
reflecting a high success rate in the hiring process. However, Bahrain had the lowest
hiring rate as reported by the participating organizations which signifies a need to work
on talent acquisition and retainment.
Turnover Rate:
KSA recorded the highest turnover cited at 14.1%, which might be attributed to various
initiatives and mega-projects fueling economic growth and creating a vibrant market,
such a dynamic environment encourages talents to move and seize better opportunities
arising from the current transformation.
Technology:
Investment in AI
Only 23% of organizations in the GCC are investing in Artificial Intelligence. Most of
those investing or planning to invest agree that the implementation will positively impact
the growth of the business and create value for both shareholders and clients. 52% still
do not invest in Artificial Intelligence, opting for the traditional way of operating
businesses.
Organizations in the UAE and KSA are reported to be the highest in investing or
planning to invest in AI in 2024.
Impact of AI:
According to the report, 60.8% of participating organizations that invested in AI in the
GCC have anticipated benefits from implementing AI in 1-3 years. Furthermore, 31.3%
report that they have already benefited from AI applications in their operations. UAE and
KSA are already starting to notice the effects of AI as reported by participants.
According to the participating organizations, the areas of Human Resources that are
most impacted by AI, are performance management and employee training and
development, at 58.9% and 48.7%, respectively.
Challenges of AI Adoption
52.5% of the participating organizations that started the adoption of AI are facing
challenges related to the availability of skilled professionals. Additionally, 46.2% of
organizations reported that developing complex, advanced technological infrastructures
is a significant challenge.
41.1% of organizations in the GCC consider the lack of financial resources an additional
challenge, which includes the investment needed to acquire the software and licenses,
ongoing operational costs, and hiring skilled professionals.
Talent Management
Promotion Rate:
According to the participating organizations, the GCC achieved a promotion rate of
57%, with KSA at the forefront in awarding the most promotions, closely followed by Qatar, while Oman provided the least promotions.
Compensation & Benefits Increments in 2023 77.6% of participating companies in the GCC countries have granted increments to their employees during 2023, with the most common“performance-related increase” at 46.7%, followed by“fixed rate increase” at 32.1%.
Average Salary Increment in 2023:
The average salary increment in the GCC countries in 2023 recorded 6.7% compared to
2022, which recorded 5.2% on average. This increase is due to several factors,
including the strong performance of the labor market, which reached an unprecedented
peak in the past decade, especially In KSA and UAE.
Increments & Bonuses for 2023
64% of the participants provided annual bonuses to their employees for 2023, reflecting
an increase from 2022's 62.7%.
UAE is the highest country providing bonuses to attract and retain employees, followed
by Saudia Arabia.
Participating organizations in Bahrain offer the lowest bonuses.
Projected Increments & Bonuses for 2024
83.3% of participating organizations in the GCC are planning to provide increments or
bonuses in 2024.
47.6% of the participants will provide both a salary increment and a bonus in 2024,
while 16.7% will not provide to their employees.
UAE (followed by Kuwait) leads as an example, as participants will provide at least one
type of monetary benefit, which is a definite way to boost employee satisfaction and
retention levels.
BOD Remuneration
In the GCC for the year 2022, the average number of board members stood at 9, with
their total compensation averaging $2,031,549. On average, listed companies
distributed 0.98% of their profits as BOD compensation, resulting in an average cost per
member of $230,799. Oman has the highest remuneration as a percentage of total
profits at 0.850%. However, the UAE has the highest board remuneration at $391,810.
For further details about the report insights, please visit this link:
capita/reports/procapita-annual-report-2023-2024-gcc-hr-trends-and-practices/
About PROCAPITA:
PROCAPITA is a management consulting platform offering a selection of services to guide
companies to transform their business into a successful investment including services like HR Advisory, recruitment advisory, and many more.
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