Hiring, pay rethink amid financial crisis

FINANCIAL CRISIS: GCC companies are reviewing their expenditure, looking to rein in salaries. (Getty Images)

GCC companies are rethinking their approaches to hiring and pay rises as the global financial crisis tightens its grip, according to a survey by human resources consulting company Hewitt Associates released on Sunday.

Thirty-eight percent of the companies questioned claimed that they were taking proactive measures to curb expenditures, reflected in a number of them lowering their salary increase projections for 2009 by nearly a third compared with their responses to an earlier Hewitt survey.

As a result, salaries of GCC employees are likely to increase by nine percent in 2009 compared with an average of 10 percent in 2008, Hewitt said.

The company said this figure might well fall even further, and raised the possibility that some organisations could opt for a hiring freeze and/or staff reductions.

"We had firms which predicted a fantastic year ahead with double-digit salary increases a couple of months earlier coming back to us with a significant rethink of their compensation strategy," Debabrat Mishra, consulting business leader at Hewitt Middle East, said in a statement.

Multinationals make up the majority of the companies that are likely to take strategic action to cut expenditure in the current economic climate, Mishra said.

“Multinationals will implement global cost and manpower reduction strategies with uniformity across markets whereas companies based in GCC will wait and watch before taking any measures in order to protect long-term business outcomes,” Mishra said.

The survey also showed that employers remain keen to maintain high quality talent, with companies planning to recruit selectively and allocate a larger chunk of their salary increase budgets to reward top performers.

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