Sunday 06 / July / 2025
Muscat: A new report points towards another year of conservative and cautious compensation and benefits strategies in the Gulf Cooperation Council (GCC).
Predicted lower level salary increases are significantly down, with 20.96 per cent of companies expecting to give only a 3.5 per cent increase or less and 10.51 per cent of companies expect to implement pay freezes and 3.36 per cent believe that they will have to reduce salaries, according to Informa’s sixth annual GCC Compensation and Benefits Trends.
The majority of our 2018 survey participants do not have an optimistic outlook for their prospects of
increasing salaries this year. Nearly 20.96 per cent of companies expect to give only a 3.5 per cent increase or less, 8.95 per cent are planning to increase salaries by 4 per cent and 8.72 per cent aim to give a 5 per cent increase.
These are all markedly lower rates compared to 2017. However, instances of larger pay rises seem to be on the horizon for the GCC, as 17.23 per cent of our survey’s participating companies expect to increase salaries of between 5 per cent to 6.5 per cent or even higher.
Unclear conditions
It’s clear that much of the uncertainty that characterised the 2017 C&B report is still in effect for companies operating in the GCC. This has led to much more conservative outlooks from many respondents than could be expected after the surprisingly positive results of 2017 in these areas.
Value added tax (VAT) remains a question mark, attrition rates are up, projected pay increases are markedly down, pay freezes and reductions are predicted by a sizeable minority of our respondents, and when it comes to bonuses: confusion still reigns.
The result of all this uncertainty and volatility is that many companies are choosing to adopt the “wait and see” approach before making significant changes. This is underlined by the large majority of respondents who haven’t invested in data capture technologies, or adjusted their healthcare provision policies or pension offerings, or taken VAT into account regarding benefits.
Despite these unfavourable predictions, there are also a number of data-driven outcomes that signify positive changes in the landscape, and point towards more GCC companies making dynamic investments in improving their C&B structures to deliver long-term success. A crucial factor to note is that training and development investments are significantly up, which is emblematic of a growing proportion of companies’ desire to combat attrition by assertively driving employee engagement in order to make them feel valued.
Similarly, fewer companies are willing to experiment with adjusting their healthcare provision package (a vital C&B consideration from last year) or offering wellness programmes.
However, plenty of GCC companies are still planning to develop dynamic C&B strategies this year. “Improving employee engagement” has become the top area of focus for 2018, mentioned by 45.34 per cent of the survey’s participants. This is closely followed by “improving employee retention,” which is up to 41.18 per cent.
