Saudi salaries likely to grow 5.4% in 2015

Companies across Saudi Arabia are predicting an average salary increase of 5.4 percent in 2015 according to the latest figures from Aon Hewitt, the global talent, retirement and health solutions business of Aon plc.
The figure is slightly down from forecasts made in 2014 and 2013, which was 6 percent and 5.8 percent respectively, indicating that companies in the Kingdom are being slightly more conservative with their budgets. However, employees in Saudi Arabia were given an average salary increase of 5.2 percent in 2014, only slightly below the original projection of 6 percent.
According to the research firm Capital Economics, inflation in Saudi Arabia is likely to remain steady at around 3.5 percent- 4 percent over the coming years, as growth weakens in comparison to the past decade.
Released as part of its annual Global Salary Increase Survey 2014, the figures are based on data from a robust comparative group of over 500 organizations across the Middle East, including 73 in Saudi Arabia. The report offers a unique snapshot of salary increase trends which, in turn, enables organizations to benchmark their forecasts with the market in order to remain competitive.
Robert Richter, compensation survey manager, Aon Hewitt Middle East, said: “The latest figures show that corporates continue to have confidence in the 2015 economic outlook despite the slightly lower predictions made for the year ahead. It is normal procedure for companies to rethink their salary projections on an annual basis and the latest figure should not be a cause for concern for employees. Final budgets will be determined by HR and the management team of a company, and the numbers we receive are the projections made by HR only; it seems this year HR will be more in line with the final numbers.”
Across the GCC, companies are predicting an average salary increase of 5.1 percent for 2015, a figure slightly down from predictions made for 2014, which was set at 5.5 percent, indicating a similar approach has been taken across the region.
Among the participating GCC organizations, Oman also gave a higher salary increase projection at 5.4 percent for 2015, a slight decrease from the 2014 predictions.
Bahrain gave the lowest salary increase projection at 4.5 percent, followed by the UAE at 4.8 percent, Qatar at 5.2 percent and Kuwait at 5.3 percent. Aon Hewitt has been conducting the Global Salary Increase Survey on an annual basis for 36 years and launched it in the Middle East for the first time in 2009.