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Salaries no longer attract Middle East employees, says study

Salaries are no longer the top attraction driver for Middle East employees.

With up to 75 per cent of Middle East employers say hiring activity has increased over the last year, compared to 48 per cent globally, 70% of Middle East employers say they are facing difficulties more than employers in the rest of the world in attracting and retaining critical skill and high potential employees, according to a new study from professional services firm Towers Watson.

Middle East employees identify career opportunities and job security as the most important considerations when looking for a new role, compared global employees where base pay is the number one attraction driver, The Towers Watson 2014 Talent Management and Rewards (TMR) Study & Global Workforce Study (GWS) reveals.

The study captures the perspective of over 1,600 organizations on attraction, retention and engagement issues that are essential to the development of an effective employment deal and total rewards strategy.

Salaries was found to be even less important to the youngest segment of employees – those under 30 – who give greater value to career opportunities, learning opportunities and challenging work, the report stated.

Employers do not consider job security an important key retention driver for employees.

Commenting on the results of the study, Ahmad Waarie, MD at Towers Watson Middle East says:”As firms endeavor to achieve profitable growth, they should focus on crafting and communicating an employment deal that will help to attract and retain employees with critical skills, and engage all workers by striking a reasonable balance between employee and employer needs and expectations.”

“Improving career opportunities should be a key focus for all organisations,” he adds.

While pay is not a key attraction driver for employees under 40 years of age; for those above 40 it is still the most important factor and the same is true for pay as a retention driver for all age groups. This indicates that, while salary may not be the main reason for joining a company, it can become a reason to leave if pay does not keep pace with the employee’s development and increasing added value.

Despite the importance of pay when it comes to retaining employees, companies are falling short in the delivery of their pay programs. “Our research shows that only a third of employees see a clear link between their performance and their pay, while two thirds of Middle East employees think they are not paid fairly compared to their peers” adds dr. Waarie. “This reflects our experience that many organizations in the region do not execute nor communicate their pay programs effectively. The basis of a compelling employment deal should therefore be a clear pay philosophy and competitive pay programs that are clearly articulated to all employees”.