Salaries across the GCC region are expected to rise by an average of 5 per cent in 2023 amid a buoyant hiring market that is being driven by strong market confidence and a boost in investments, according to recruitment specialist Hays Middle East.
Despite global economic uncertainty, the GCC has remained stable with continuous investment and diversification creating new jobs across multiple sectors, Sarah Dixon, managing director of Hays Middle East, said in the company’s 2023 GCC salary report on Tuesday.
“2023 promises to be a prosperous year for the labour market and the GCC in general,” Ms Dixon said.
“It’s now the region with one of, if not the most, positive economic outlooks for the coming years … this is positive news for jobseekers and a challenge for employers looking to attract and retain top talent.”
Last month, economists and analysts told the Abu Dhabi Economic Summit that inflation across the GCC was significantly lower than most advanced and emerging market economies.
“GCC economies, especially Saudi Arabia and the UAE, are in a ‘sweet spot’ with solid underlying economic growth, relatively low inflationary pressures, strong public finances and external accounts supported by high oil prices,” Simon Williams, chief economist at HSBC for Central and Eastern Europe, Middle East and Africa, said during the summit.
The global economic uncertainty has been fuelled by the Russia-Ukraine war, record-high inflation, rising interest rates and a cost-of-living crisis in many countries.
However, the GCC remained steadfast and continued to invest and grow, Hays said in the report, which polled almost 700 employers and about 1,400 candidates and employees.
About 74 per cent of employers in the GCC expect salaries within their organisation to increase this year by 5 per cent, Hays added.
Aside from salary, the benefits package is the number-one factor that attracts employees to a new role, the study found.
Flexible working, child education allowances and air tickets are the most valued benefits for employees, it added.
“Offering flexible working options is a viable way for employers to counter the fierce competition … professionals place work-life balance and flexible working as a top priority when looking for a new job,” Hays said.
“While only 49 per cent of organisations in the GCC currently offer remote or hybrid working options, 20 per cent of employers anticipate that employees will be required in the workplace more.”
UAE salary guide 2023 — in pictures
Meanwhile, technology remains the GCC’s most active industry sector for hiring, with 77 per cent of organisations increasing their headcount last year.
The hiring spree has been driven by consistent local and foreign direct investment in focus areas such as data, cyber security and cloud solutions, Hays said.
The positive hiring trend is in contrast to the global mass layoffs in the sector by companies such as Amazon, Facebook parent Meta Platforms, Twitter, Spotify and Intel, resulting in more than 125,600 workers being laid off this year alone, according to layoffs.fyi, which has been tracking technology sector job losses since the beginning of the pandemic.
In the UAE, the Arab world's second-biggest economy, companies will also accelerate hiring of Emiratis this year as they work towards meeting Emiratisation quotas and diversify their workforces, according to Hays.
In January, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, said the first phase of the UAE’s Emiratisation drive was a success after tens of thousands of Emiratis were successfully placed in private sector jobs last year.
In 2023, private sector companies in the UAE with at least 50 employees are required to add a total of 2 per cent of Emiratis to their workforce — 1 per cent by July 1 and another 1 per cent by the end of the year.
The UAE jobs market has made a strong recovery from the coronavirus-induced slowdown, boosted by the government’s fiscal and monetary measures.
Watch: Some of the stats behind the UAE's hiring boom
Saudi Arabia’s industrial sector is also expected to dominate the employment market this year, driven by the creation of new jobs through mega-projects such as Neom and a rise in the number of organisations setting up operations in the kingdom.
Hiring in Saudi Arabia’s non-oil sector in December increased at its fastest pace since 2018, driven by “robust” business activity, according to the Riyad Bank Saudi Arabia purchasing managers’ index.
“The industrial sector is expanding at an exponential rate,” Hays said.
“With the kingdom poised to take further advantage of its abundant natural resources and central geographical location, industrial diversification into new products and materials will lead to a focus on talent with experience, technical skills and operational knowledge.”
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Russia's Muslim Heartlands
Dominic Rubin, Oxford
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The bio
His favourite book - 1984 by George Orwell
His favourite quote - 'If you think education is expensive, try ignorance' by Derek Bok, Former President of Harvard
Favourite place to travel to - Peloponnese, Southern Greece
Favourite movie - The Last Emperor
Favourite personality from history - Alexander the Great
Role Model - My father, Yiannis Davos
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Common OCD symptoms and how they manifest
Checking: the obsession or thoughts focus on some harm coming from things not being as they should, which usually centre around the theme of safety. For example, the obsession is “the building will burn down”, therefore the compulsion is checking that the oven is switched off.
Contamination: the obsession is focused on the presence of germs, dirt or harmful bacteria and how this will impact the person and/or their loved ones. For example, the obsession is “the floor is dirty; me and my family will get sick and die”, the compulsion is repetitive cleaning.
Orderliness: the obsession is a fear of sitting with uncomfortable feelings, or to prevent harm coming to oneself or others. Objectively there appears to be no logical link between the obsession and compulsion. For example,” I won’t feel right if the jars aren’t lined up” or “harm will come to my family if I don’t line up all the jars”, so the compulsion is therefore lining up the jars.
Intrusive thoughts: the intrusive thought is usually highly distressing and repetitive. Common examples may include thoughts of perpetrating violence towards others, harming others, or questions over one’s character or deeds, usually in conflict with the person’s true values. An example would be: “I think I might hurt my family”, which in turn leads to the compulsion of avoiding social gatherings.
Hoarding: the intrusive thought is the overvaluing of objects or possessions, while the compulsion is stashing or hoarding these items and refusing to let them go. For example, “this newspaper may come in useful one day”, therefore, the compulsion is hoarding newspapers instead of discarding them the next day.
Source: Dr Robert Chandler, clinical psychologist at Lighthouse Arabia
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