By Staff writer
Hay Group report says employees in Gulf kingdom's banking sector fare best with average 7.1% rise
Salaries in Saudi Arabia have increased well above inflation this year despite the impact of lower oil prices on the Gulf kingdom's economy, according to latest data from global management consultancy Hay Group.
The company said salaries have increased by 4.5 percent, 1.9 percent above the rate of inflation, while the difference between salaries of senior management and entry level staff has continued to grow.
Hay Group said employees in the banking sector have fared best with an average 7.1 percent increase and the highest level of variable pay.
The research is drawn from Hay Group's annual Compensation and Benefits Report for Saudi Arabia, which measures salary payments made by 482 companies, representing 430,000 employees in the kingdom.
It said the increase in salaries was marginally below the rate of 5 percent, which had been forecast last year.
Wendell D'Cunha, Hay Group's regional manager for services, said: "With inflation at 2.6 percent, these increases represent a growth 1.9 percent in employees' real spending power."
Hay Group's report showed that the highest increases have been seen by lower level employees with an average of 5.7 percent.
"The difference between salaries of senior executives and entry level workers has grown more slowly than in other parts of the Middle East. However with the average head of department earning 7.3 times more than the average entry level staff member; Saudi Arabia is still well above the regional average in this regard," said D'Cunha.
He added that despite the economic uncertainty caused by falling oil prices and the poor performance of global markets, businesses are forecasting that salaries will increase by approximately 5 percent again in 2016.
The report also said women comprise 5 percent of the research and are paid an average of 10 percent more than the general industry average.
D'Cunha said: "When looking at the data, it appears that women are paid a higher than average wage. This is because there are no women represented within the large, low-paid labour force and instead they fill mainly support positions in industries that tend to pay more.
"In the banking sector, which does not have a low-skilled labour force, women are paid an average of 10 percent less than their male counterparts."