More than half of employees and employers in Saudi Arabia expect salaries to increase this year, while the Kingdom has been one of the most economically resilient countries in the region in the wake of the COVID-19 pandemic, an annual report released by Hays recruitment firm has found.
The Hays 2021 Saudi Arabia Salary & Employment Report, released on Monday, surveyed more than 600 professionals in the Kingdom to provide an insight into the impacts of the coronavirus on the job market in 2020 and expectations surrounding salaries and jobs in 2021.
Despite the COVID-19 pandemic negatively impacting some salaries in 2020, with nine per cent of those working in the Kingdom experiencing a pay cut, the report found that the job market has a positive outlook in 2021 with 53 per cent of employers and 56 per cent of employees expecting salaries to increase over the next 12 months.
When looking at 2020, despite almost one in ten Saudi employees receiving a pay cut as the pandemic caused economic aftershocks across the world, 39 per cent were still fortunate enough to receive a pay increase.
Chris Greaves, managing director of Hays in the Middle East, said the outlook for salaries and Saudi Arabia’s overall jobs market in 2021 is even more positive.
“Saudi Arabia has not been exempt from the negative impacts of COVID-19,” he said. “Indeed, lockdown measures and consequential reductions in energy prices forced a number of organizations in the country to make redundancies and reduce salaries in a bid to remain operational.”
“However, this was largely only during the height of the pandemic and when looking on a global scale, Saudi Arabia’s job market has fared very well.”
The survey found both of pay cuts and redundancies to be comparatively lower in Saudi Arabia than in other regions.
Twice as many (18 per cent) of professionals in the UAE faced salary cuts than in Saudi, and nearly half (45 per cent) of employers in the UAE were forced to lay off staff, while more than two thirds (68 per cent) of organizations in Saudi Arabia made no redundancies.
“This really does highlight the resilience of the Saudi economy,” said Greaves. “The UAE alone has been relatively robust throughout the pandemic and yet results from our survey show that Saudi Arabia has been affected even less so by the epidemic.”
“Thanks to the government’s ongoing investment in non-oil revenue streams – in accordance with Vision 2030 – many organizations have continued to successfully operate in the country and there is much positive sentiment ahead.”
Of those Saudi Arabia employers who took part in the survey, a significant 81 per cent said they were already in recovery, business as usual, or growth phases following the pandemic, with 62 per cent expecting business activity to increase in 2021 and 76 per cent planning to recruit additional headcount in the next year.
“From our own experiences of working in Saudi Arabia, we have certainly witnessed growing confidence in the market since the last quarter of 2020,” said Greaves.
“When it comes to salaries, while organizations will want to keep a lid on pay increases in an attempt to recoup some of the financial losses made in the past year, we expect this optimism to translate in a higher number of pay rises in 2021 than were awarded in 2020.”
Of the employers who took part in the survey and who are responsible for paying salaries, 53 per cent anticipate they will award pay rises to their employees in 2021, most commonly increasing rates by up to five per cent.
The survey also found salary to be the number one factor why 44 per cent of professionals working in Saudi Arabia are looking to move jobs in the next 12 months.
“Salary offerings have always been fundamental to attraction strategies in Saudi Arabia but we expect this to be of even greater precedence in 2021 with the upcoming Iqama reforms,” said Greaves. “Given employees – particularly expats working in private sector organizations – will no longer need employers consent to leave an organization once their contract is up, we expect mobility of labor to be higher than previous years with professionals being more willing to leave an organization based on pay offered by another."
“Employers will need to be competitive with salaries, paying more than others to secure the top talent.”