‘Increase in salary unlikely in Oman this year’

Muscat: Do not expect a hike in salary in 2016 given the current situation, company officials and business owners stated clearly on Tuesday.
They were reacting to the findings of the latest research released by online recruitment firm GulfTalent, which said the average pay increases in Oman and across the Gulf Cooperation Council (GCC) are set to be lower in 2016 than at any time over the past decade.
Read also: Oman salaries projected to grow this year: Survey
Reacting to the survey, Ahmed Al Hooti, a member of the Oman Chamber of Commerce and Industry (OCCI), said it’s quite difficult to see salary increases in the private sector given the current financial situation.
“The private sector should not be connected to the drop in oil prices. The private sector should be separate from anything involving the oil price in the normal scenario. But as most private sector companies depend on government projects, any salary increase is almost impossible unless there are some changes in the future in oil prices. Many companies get less projects and others are affected by the financial situation of the government,” explained Al Hooti.
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The Muscat-based economist said the findings of the survey are in line with emerging trends in the GCC economy.
“The bulk of gross domestic product of GCC countries is contributed by oil, which goes into funding the infrastructure and development activities of the region. As the oil prices have declined steeply with dim hope of recovery, one can expect lower salary increases to continue for a few more years,” he noted.
“The projected oil price until about 2018 is around below US.$60 per barrel. Given that scenario, companies will experience lower growth in sales, fall in revenues and profit. Eventually, everyone will look for ways to reduce expenditure. Obviously, there is a higher likelihood of a modest increase or even freeze in wages for a few years unless something dramatic happens. This does not mean that the situation will be the same for all industries. Some sectors, which are in the growth stage, for instance, e-commerce and new technologies may still offer better wages,” he added.
Reacting to the survey, company officials and business owners admitted that the average pay rise in Oman would be lower in 2016 unless oil prices went up drastically in the next couple of months.
The next few months are very important for business houses in Oman. If there is an improvement in oil prices, then that means more business and more money for employees, they stated.
But as of now, the situation is not good for companies so they cannot pay increments.
Mohammed Shafiqul Islam Bhuiyan, general manager of New Star International Travel and Tour LLC, said it’s impossible for most companies to give any hike this year as the business is not good. “Some small companies are even cutting down on the perks,” he said.
“But if the oil prices go up, then we have a hope of more business, which can transform into more money for employees,” he said.
Shiv Gupta, chief executive officer of an IT company-based in Muscat, said, “The market has slowed down and they are currently experiencing a delay in receiving payments from the market. Taking everything into account, very few companies will even consider an increase of 4.4 per cent. ”
Hussein Ali, an HR manager at a private sector company, said there is no intention to raise any staff member’s salary in the coming period. “It is only the 3 per cent posted by the Ministry of Manpower. The company’s business is affected by the oil price drop nowadays and it is quite hard to take a decision on such things in the current time,” said Ali.
He added that maybe in future if the business of a company sees a raise, then there might be a chance to take such a decision, but definitely not now.
According to a report, professionals in the United Arab Emirates (UAE) are expected to enjoy the region’s second highest salary increase at 5.3 per cent; Qatar is next with 4.7 per cent, followed closely by Kuwait and Oman at 4.6 and 4.4 per cent, respectively.