Businesses in Qatar appear to be tightening their belts when it comes to spending on salaries in the coming year, with many saying they expect to increase wages in 2015 by a smaller rate than the year before.
In a new report of 500 regional companies, including 47 from Qatar, salaries are expected to increase 5.2 percent here in 2015, which is slightly less than the 5.6 percent the survey predicted for 2014.
However, the 5 percent is significantly less than the 8 percent jump in wages that Cost of Living Reports Middle East forecast for 2014.
The conservative forecast comes amid a continuing rise in the cost of living in Qatar, particularly with regards to rental accommodations, meaning people working here have less money in their pockets at the end of the month.
The new figures, released by global recruitment organization Aon Hewitt, show Qatar employees are predicted to have slightly lower increases than some of their peers in the region, including Saudi Arabia (5.4 percent), Oman (5.4 percent) and Kuwait (5.3 percent).
However, at 4.8 percent and 4.5 percent, the UAE and Bahrain’s increases are less than Qatar’s. The GCC average stands at 5.1 percent.
While forecasted increases for Qatar salaries in 2013 and in 2014 were 5.6 percent, the actual boost to workers’ wages over this year has been 5.1 percent, according to the latest Global Salary Increase Survey.
Regional competition
Talk of wage increases comes as Qatar enters a new phase of economic expansion, and begins a global scramble to attract the brightest and best to ensure it meets deadlines for many infrastructure projects ahead of the 2022 World Cup.
Regional competition to attract skilled workers has intensified since November, after Dubai was selected to host the World Expo in 2020.
In a report issued this month, QNB forecast a significant expansion of Qatar’s labor force, saying more women and white-collar employees are expected to be brought on board to keep pace with development.
The majority of new residents, however, will be construction workers, propelling the population from around 2.2 million to 2.5 million by 2016, the report stated.
Expats mulling job offers in Qatar, on the belief they can expect sizable salaries with regular annual increases, may pause given the latest wage forecasts.
A report published earlier this year found Qatar to be the most expensive country in the GCC, due to its high cost of living.
Meanwhile, daily living in Qatar continues to get more expensive, with residential rents in particular showing increases of nearly 8 percent year-on-year, and many schools this year allowed to increase their fees by up to 10 percent.
Thoughts?
I like that last picture.
It is interesting that Qatari government companies expect contractors to reduce their price every year, even though inflation in Qatar increases each year, especially in terms of rentals. So it is not surprising companies have to keep salary increases in check, otherwise they would go out of business. However also getting paid by Qatari government companies is a problem as well…..
And as I keep saying, Qatar is not just competing with other Gulf states for construction professionals, they’re competing with recovering western economies with rapidly increasing job vacancies. In recent years many professionals have turned to MENA in desperation because of redundancy and the lack of opportunity at home, but now they can get employment within their comfort zone.
an increase would be nice
When will the “bubble” burst if these rates are left unchecked? If salaries continue to increase at a rate less than costs then at some point no one will show up to work. It doesn’t appear that there are any government practices to stall that inevitability, but I guess the million dollar (probably more than that) question is whether that tipping point happens before or after 2022.
Rumour is that big government companies are going to take a way the market allowance which is 45% of the salary for a Western expat…Qatar Airways will be the only winner with a very short spike in demand to Europe, Canada and Australia…
I don’t understand that what is the 45% market allowance? Is it a specific allowance paid to westerners only to attract them? If so, I can see them leaving pretty quick for other destinations if they halve their salary.
I think he means the % bonus expats get for working overseas. I think mostly given to expats who work for American companies but maybe others as well..
Wish I was getting 45%. Not even half that.
Salary increase? Hahaha. Why increase anyone’s salary when they cant leave unless they leave the country for 2 years? Or is the predicted salary increase only for locals? Maybe not I seem to remember something a little more than 5% last time.
why not putting again a cap on rent increases?? Rent increasing in compounds where no refurbishing or any new services been done….speculation?
The so called “salary increase” in our company is a big joke. The company gives us increase every year but puts them in allowances. Not once have I received an increase in my basic salary. 5 years back, I only had transportation and housing allowance. Now I have telephone, education, overtime allowances and the list keeps getting longer… Of course when I go for vacation, leave pay is only based in basic salary and I expect the same basis when they pay out my gratuity. #onlyindoha
Hahahaha.. now Salary Increase is a joke where I work… only locals get an increase… expats are “entitled” to nuttin.. no salary increase.. end of service benefits, housing allowances… so this raise in salary means nuttin unless for all..