Hewitt Associates findings reveal that average salaries paid out in 2007 constituted almost 60% of total operating expenses for banks in Middle East

The study deploys Hewitt's 65 years of experience in world-class HR consulting and leading-edge training and development programs, to create a profile of the current and emerging trends in rewards and compensation practices amongst the leading banks across the major countries in Middle East. In total, 26 leading banks, both regional and multi-national, were included in the sample.

Commenting on the announcement, Debabrat Mishra, Consulting Business Leader, Hewitt-Middle East, said: 'We are very pleased to announce the completion of this comprehensive survey. We believe that it sheds light on the current and emerging trends of a very important economic sector in the Middle East. Not only is GDP growing across most countries in the Middle East but revenues from non-oil contributions are on the rise. In short, these economies are diversifying fast and the financial sector is an important cornerstone of this development. Consequently, understanding the human resource challenges facing this sector is imperative for its sustained growth. This survey provides invaluable information to policy makers and influencers about how leading banks are approaching compensation and benefits for employees across different management levels. The data yielded will help banks make more strategic HR decisions in line with their business goals and growth'.

An overview of the comparator sample reveals that across all asset sizes, average salaries paid out in 2007 constituted approximately 60% of total operating expenses of banks, whereas, actual training and development expenses across all asset sizes were between 2%-5% of total employee expenses. It also emerges that the average wage bill is the highest in Oman and Qatar.

In terms of compensation structure, while basic salary contribution is fairly consistent across levels and countries, allowances form a much larger portion of Total Pay in Qatar and Oman (23%-41%) whereas in terms of composition of Total Pay, the variable pay contribution is the highest in Bahrain 13%-38% across levels versus 6%-18% in other countries.

Most banks peg themselves at the median or 75th percentile of the market. While 30% of the banks further differentiate the positioning within the organization by level, 90% position top performers higher than the rest of the employees.

Another pertinent trend is that organisations across the board are investing more in training and development. There are two primary reasons for this. Firstly, talent shortages are being felt in all industry sectors and across almost all geographies. Consequently, companies are putting more emphasis on hiring and training new personnel and on training current employees for new roles. There is an increased focus on talent management. Organizations are increasingly recognizing that learning and development is part of an integrated talent management process that includes recruiting, performance management, leadership development and succession planning.

'The talent management challenges in the Middle East are on the rise, combined with the increasing wage bills. This year, our research will be extended to additional countries in the GCC. Our aim is to provide the banking sector with analysis that can help them to deal with the emerging complexities effectively', added Mishra.