More than half of skilled professionals working in Saudi Arabia likely to receive a pay increase in 2021
Despite the Covid-19 pandemic negatively impacting some salaries in 2020
53% of employers and 56% of employees working in Saudi Arabia expect salaries to increase in 2021, that’s according to Hays 2021 Saudi Arabia Salary & Employment Report, released today by the global recruitment firm. The report, which was compiled from a market survey of more than 600 qualified professionals operating in Saudi Arabia, provides insight into the impacts of Covid-19 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 9% of those working in the Kingdom experiencing a pay cut compared to a lower 4% in 2019, a significant proportion, 39%, were still fortunate enough to receive a pay increase and the outlook for salaries and Saudi Arabia’s overall jobs market in 2021 is more positive still.
“Saudi Arabia has not been exempt from the negative impacts of Covid-19. Indeed, lockdown measures and consequential reductions in energy prices forced a number of organisations 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”, says Chris Greaves, Managing Director of Hays in the Middle East.
In agreement with this, the survey found both the occurrence of pay cuts and redundancies to be comparatively lower in Saudi Arabia than in other regions. Double the number (18%) of professionals in the UAE faced salary decreases than in Saudi, and nearly half (45%) of employers in the UAE were forced to lay off staff, while more than two thirds (68%) of organisations in Saudi Arabia made no redundancies.
“This really does highlight the resilience of the Saudi economy. 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 organisations have continued to successfully operate in the country and there is much positive sentiment ahead,” says Chris.
2021 sentiment
Of those Saudi Arabia employers who took part in the survey, a significant 81% said they were already in recovery, business as usual, or growth phases following the pandemic, with 62% expecting business activity to increase in 2021 and 76% 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. When it comes to salaries, while organisations 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.”
Indeed of the employers who took part in the survey and who are responsible for paying salaries, 53% anticipate they will award pay rises to their employees in 2021, most commonly increasing rates by up to 5%.
The survey also found salary to be the number one factor why 44% 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. Given employees – particularly expats working in private sector organisations – will no longer need employers consent to leave an organisation once their contract is up, we expect mobility of labour to be higher than previous years with professionals being more willing to leave an organisation based on pay offered by another. Employers will need to be competitive with salaries, paying more than others to secure the top talent,” concludes Chris.
