One in three GCC firms gave pay rises in Jan-April - survey

A third of GCC companies gave their employees a raise in the first four months of 2009, and more than one in three firms plan to increase their workforce this year, according to new research.

The median salary increases for different employee groups for 2009 ranged between five and six percent, with 34 percent of companies having already provided salary increases in January or April, said the study published by HR consultancy Mercer.

Twenty three percent will be determining salary increases in July and 22 percent said no increase will be made this year.

“The study has brought to light a sense of shared confidence amongst GCC based companies,” said survey project leader Bassam Gazal.

However, 36 percent of companies plan on revising the performance measures they base their incentive plans on, and 15 percent said they would change their long term incentive mix.

Out of the 67 companies surveyed, only 25 percent said they plan to reduce headcount this year, while 42 percent intend to increase it and 33 percent see it remaining at current levels for the rest of the year.

The number of companies hiring is projected to rise to 60 percent next year.

The study surveyed 67 multinational and local companies across the GCC representing more than 175,000 employees in all key economic sectors.

“There is a quiet and determined confidence here in the GCC right now, about the rest of the year and into next year and beyond. It’s something we’ve been seeing in pockets for a little while, and it’s good to know that our survey results are backing that up,” said Gazal.

Those findings may not tally with a growing sense of job insecurity among Gulf residents, but Bob Schuetz, a senior partner in Mercer’s GCC operation, insisted that companies in the region have thought twice before retrenching people, and that they have even been less prone to cut staffing levels than their western peers.

This enables them to limit spending on recruitment and training once the economy begins to recover, he added.

“We’ve spoken to a number of leading companies from around the Gulf who are looking to adopt a more long term HR strategy to secure their company’s future, attract and retain talent in key positions and ensure an ongoing pipeline of talent for core skills and leadership development,” Schuetz said.

Companies that plan on reducing their headcount are cutting mostly from support and administration, including non-sales professionals and managers, Mercer found.

More than half (52 percent) of companies had set their business targets for 2009 higher than in 2008, and 94 percent said it was “very” or “somewhat” likely they will be met.

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