Hewitt Associates Middle East study reveals salary increase stands at 7.9%, freeze drops to 14% in 2010

These findings were based on Hewitt's Annual Salary Increase Survey in the Middle East for 2009-10. The salary increase percentage excludes organizations that had opted for salary freeze or salary cuts.

While the increase percentage is far from the double digit growth that the region has seen over the years, it is a sign of a positive outlook for the next year in the region. The survey of 239 large organizations across Middle East reveals that the number of organizations opting for salary freeze is expected to drop from 42% in 2009 to 14% in 2010. A similar trend is expected on salary cuts; with the number of organizations planning on cuts is expected to drop from 5.7% in 2009 to 1.9% in 2010.

Despite multiple measures adopted to control costs, interestingly, organizations continue to reward high performers. They maintain a significant level of differentiation on performance-driven pay between high performers and average performers. The high performers on an average received twice the salary increases at top and senior management levels and about 1.7 times the salary increases at lower levels.

Hewitt's Annual Salary Increase Survey in the Middle East 2010 covers organizations across Bahrain, Egypt, Kuwait, Qatar, Saudi Arabia and UAE and spans 19 primary industries and their sub-classifications including Aerospace, Construction, Consumer Products, Financial Services, IT, Pharmaceutical, Real Estate, Professional Services etc.

Mr. Debabrat Mishra, Principal and Consulting Business Leader, Hewitt Associates Middle East, said:

"The economic downturn had a significant impact on the Middle East organizations in 2009. Expectedly, salary increase projections have dipped from previous years. But an average increase of 7.9% can be considered significantly healthy in today's environment. In fact, according to Hewitt's salary studies across global markets, the Middle East salary projections for 2010 are among the highest in the world."

The effect of the economic crisis of 2008 continued to exhibit itself in 2009 compelling nearly 28% of organizations to reduce the year-end performance bonus payout. While 14% organizations reported delayed payment of performance bonus, 19% organizations lengthened the period for salary increase.

Other measures adopted by organizations to control costs include reduction in overtime pay with 35% organizations reporting this measure; and trimming perks and benefits to employees with around 8% organizations reporting this measure. Interestingly, around 34% organizations have also reported reducing year end promotions in 2009.