Browsing 'salaries' News

byShabina S. Khatri
Business
byShabina S. Khatri
Business
Photo for illustrative purposes only.

Omar Chatriwala / Doha News

Photo for illustrative purposes only.

Salaries in Qatar are forecast to grow at the lowest rate in the GCC in 2017, according to a new survey by Aon Hewitt.

Qatar is expected to see a 4.5 percent bump in pay, the firm’s latest GCC Salary Increase Survey states.

The forecast is an optimistic one, given that Aon Hewitt had estimated salaries in Qatar would rise some 4.7 percent this year, but they only actually increased by 3.6 percent.

That’s the lowest the Gulf has seen this year.

GCC Salary Increase Survey

Aon Hewitt

GCC Salary Increase Survey

The predictions are based on a survey of some 600 multinational and locally-owned companies across the Gulf about their upcoming salary spending forecasts.

According to the report, Saudi Arabia is expected to see the biggest rise next year at 4.9 percent, while Kuwait may see a 4.8 percent pay bump.

The projections are about on par with last year’s forecasted increases, though most turned out to be overly optimistic.

Salary changes in 2016, forecasts for 2017

Data via Aon Hewitt

Salary changes in 2016, forecasts for 2017

In terms of the best industries for pay hikes, the survey found that the pharmaceutical, media and food/beverage/tobacco sectors did best this year.

Meanwhile, telecoms, construction and oil and gas companies had smaller hikes, though they are expected to improve in 2017.

Challenging 2016

In a statement this week, Aon Hewitt acknowledged that this year has been an economically challenging one for the Gulf.

Qatar and its peers are indeed struggling to deal with dropping global oil prices, as reflected by widespread layoffs and budget cuts.

But the report explained that its forecast for 2017 stems from optimism about upcoming GCC-wide policies related to “inflation, taxation, diversification, and commodity pricing.”

Photo for illustrative purposes only.

Peter Kovessy / Doha News

Photo for illustrative purposes only.

For example, Qatar hiked fuel prices this year, is seeking to boost tourism revenue and talked about rolling out a sin tax soon.

In a statement, Aon Hewitt Middle East Survey Manager Robert Richter 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 programs of state investment should underpin GDP expansion into 2017.

The latest predictions for 2017 salary increases do fall in line with the general economic climate with signs of optimism on the horizon.”

Thoughts?

byPeter Kovessy
News
byPeter Kovessy
News
Photo for illustrative purposes only.

Omar Chatriwala / Doha News

Photo for illustrative purposes only.

As many local businesses and organizations look to cut costs, employees in Qatar are expected to receive their lowest salary raise in at least three years, a new report has said.

Recruitment firm GulfTalent forecast this week that salaries in Qatar will rise by an average of 4.7 percent in 2016. That’s down from an average of 6.1 percent last year, when Qatar tied for the highest in the GCC with Oman, and 6.5 percent in 2014.

Across the region, GulfTalent said low oil prices and a drop in government revenues have given rise to a “two-tier economy.”

It continued:

“Energy companies have borne the brunt of the slowdown and laid off thousands of staff, while construction firms which depend heavily on government-funded projects have also seen a slowdown in new business.

At the same time, sectors that rely on population growth and consumer spending such as retail … are showing high resilience and continue to outperform the overall economy.”

GulfTalent said many professionals are likely to face a double-whammy of stagnant salary growth due to the depressed job market and the rising cost of living.

New Woqod petrol station

Peter Kovessy / Doha News

New Woqod petrol station

In Qatar, the inflation rate hit its highest level in more than a year last month and residents are paying more for petrol and electricity.

Many tenants are also paying more for rent, even as the country’s real estate market softens.

Affordable housing

In a separate report (PDF), real estate firm CBRE said residential rents in Qatar rose 7 percent last year, down from 14 percent in 2014.

Similar to reports from other property firms, CBRE’s figures show signs that the market is cooling.

For illustrative purposes only.

Ezdan Holding Group

For illustrative purposes only.

Looking only at the second half of last year, rents increased 5 percent. And that figure declined to 1 percent in the last three months of 2015.

But CBRE suggests there is little relief coming to those earning a modest income as the market for affordable housing remains tight. The real estate firm said demand was highest for less-expensive homes in “less prominent areas of the city.”

Last year, this led to large rent hikes for some tenants who left central Doha in search of more affordable accommodations.

CBRE said it will continue to be difficult to find modestly priced villas and flats. It estimated that four out of every five new units under construction will command a rent of more than QR7,500 a month once completed:

“Despite the significant growth in the overall residential inventory, budget homes remain relatively scarce, with new supply typically orientated towards mid-high, and high-end properties,” the company said.

Thoughts?

byPeter Kovessy
Business
byPeter Kovessy
Business
For illustrative purposes only

Omar Chatriwala / Doha News

Photo for illustrative purposes only.

Qatar employers are expected to show more restraint when doling out raises in 2016 compared to past years thanks to a slowing economy, a new report has found.

According to projections made by HR consulting firm Mercer, remuneration increases in Qatar will average 4.9 percent this year.

That’s the first time the figure has dipped below 5 percent in five years, the company said in a statement.

The forecast comes as inflation in Qatar remains modest by international standards, although researchers at Qatar National Bank said they expect the rise in the cost of living to accelerate over the next two years.

In addition to base salaries, the survey takes into account non-financial compensation such as housing. Mercer Middle East principal Nuno Gomes said:

“2016 is likely to be characterized as being a year of restrictions, caution and a focus on improved efficiency.”

He added that weak oil prices, reduced government spending and underperforming financial markets are “subduing companies’ confidence and curtailing investment.”

Mercer said it expected employees elsewhere in the GCC to see similar raises. In the UAE, remuneration increases are also expected to average 4.9 percent, slightly less than the 5 percent forecast in Saudi Arabia.

Qatar forecast

Last month, Qatar’s Ministry of Development Planning and Statistics cut its economic growth forecast for 2015 nearly in half to 3.7 percent.

The explanation, the ministry said, “lies entirely in the performance of the oil and gas sector.” Low energy prices, the government added, have discouraged oil and gas firms from making additional investments in Qatar.

Al Shaheen oil field

Maersk

Al Shaheen oil field

Several of the country’s largest energy firms, such as RasGas, Maersk Oil and Qatar Petroleum have all laid off staff over the last year.

Meanwhile, regional competition for skilled construction workers – which has driven up wages in recent years – is easing as governments in the region cancel or postpone projects in response to lower revenues.

Not everyone is taking such a pessimistic view, however. Chairman of the Qatari Businessmen’s Association told the Peninsula yesterday that tumbling oil prices would not hurt private companies’ spending.

According to Sheikh Faisal bin Qassim Al Thani, who is also head of Al Faisal Holding:

“We don’t see any changes in the budget of private sector companies in Qatar due to the lower energy prices.”

Are you expecting a raise this year? Thoughts?