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Want a pay raise this year? You’ll be lucky

The region’s instability and implementation of Value-Added Tax (VAT) are factors putting companies in a spiral of uncertainty; employees are the ones who will suffer.

According to a report published by Informa, the GCC will see salary freezes this year.

Over 10% of companies are not willing to give employees any raise of salary this year.

However, it gets worse.

Choosing a career in the GCC? Here are all the details

The bad news

Informa’s report states that 3% of companies will likely reduce salaries, as VAT is making companies unsure of their revenues.

14% of companies said that VAT would be an influencing factor when considering salary increases, 30% are uncertain of what the impact of VAT will be, and 59% said that VAT would not be a deciding factor.

Gulf News reported that 15% to 20% of companies would implement a very minimal increase.

Around the world, workers are seeing a 2.5% salary increase, while the GCC, the increase averages around 2.3%.

Oman will see a 3.1% salary increase, Qatar a 2.9%, Bahrain a 2.7% Saudi Arabia a 2.6% and Kuwait 1.6%

The UAE is going to see a 5% salary increase to compensate for VAT.

There is some better news!

What’s to fear with VAT inflation on the rise?

The good news

Reported by the HR Observer, a platform for HR professionals to exchange insights and expertise, many companies are planning on implementing compensation and benefits (C&B) strategies.

Improving employee engagement has become the top focus with 45% companies mentioned and improving employee retention being 41% in 2018.

The C&B strategies are being achieved by companies investing in training programs, pension options, and transportation offerings.