GCC employers expected to resume hiring in 2017 – but salaries to stay flat

The renewed optimism among recruiters in the region comes after a difficult year in which companies cut budgets and slashed staff numbers in response to lower energy prices.

A Hays survey of 250 regional employers found that 72 per cent planned to recruit additional staff by the end of the year, with only 37 per cent hiring in 2016. Sarah Dea / The National
Powered by automated translation

Hiring across the GCC is forecast to pick up in 2017 following sharp headcount reductions last year, although salaries for existing staff are predicted to remain largely unchanged, according to a new survey by recruitment agency Hays.

A survey of 250 regional employers found that 72 per cent planned to recruit additional staff by the end of the year, with only 37 per cent hiring in 2016. The survey, which also included 2,500 employees, was conducted in the fourth quarter of last year.

The renewed optimism among recruiters in the region comes after a difficult year in which companies cut budgets and slashed staff numbers in response to lower energy prices. Thirty seven per cent of respondents reported a reduction in headcount during 2016, compared with 17 per cent in 2015.

Hays reported that the number of redundancies also doubled year-on-year, with 4 per cent of employees reporting to have lost their job in 2016.

Salaries are forecast to continue at a flat rate in the coming year, with 82 per cent of employers expecting pay rates to remain either unchanged or increase by less than 5 per cent.

“Workforce salaries are one of the single biggest costs for employers and, given the challenging economic climate of the past 12 months, it is simply not viable to offer company-wide pay rises,” said Chris Greaves, managing director for Hays in the Gulf region.

“Instead, we have seen added focus to be on individual performance-related pay, which typically amounts to a lower spend for employers than company-wide pay increases.”

Nine per cent of employees surveyed said they had received a pay cut during 2016, compared with just 1 per cent in 2015.

Hays said that 55 per cent of employees surveyed saw no scope for progression within their current organisation, with the same percentage looking to change companies during the coming year.

jeverington@thenational.ae

Follow The National's Business section on Twitter