DUBAI 26 March 2018: GCC professionals predict that compensation and benefits strategies will be much more cautious in 2018, although vehicles for employee engagement, training and development are all receiving greater attention.
Informa’s sixth annual GCC Compensation and Benefits Trends Report points towards another year of conservative and cautious C&B strategies. Predicted lower level salary increases are significantly down, with 20.96% of companies expecting to give only a 3.5% increase or less.
Some 10.51% of companies expect to implement pay freezes and 3.36% believe that they will have to reduce salaries.
Similarly, fewer companies are willing to experiment with adjusting their healthcare provision package (a vital C&B consideration from last year) or offering wellness programmes.
VAT Impact
The spectre of VAT implementation is also adding to the caution permeating 2018’s C&B landscape. The majority (58.58%) of companies will not consider VAT when deciding whether to increasing salaries in 2018/2019, while only 14.48% said that VAT would be an influencing factor. The remainder (26.96%) are still undecided about the impact of VAT on salaries.
However, plenty of GCC companies are still planning to develop dynamic C&B strategies this year. “Improving employee engagement” has become the top area of focus for 2018, mentioned by 45.34% of the survey’s participants. This is closely followed by “improving employee retention”, which is up to 41.18%.
To satisfy these focus areas, more companies are investing in training and development programmes, pension option offerings and vehicles to improve the link between employee performance and pay. Additionally, instances of larger pay increases are on the rise, as 17.23% expect to increase salaries by between 5% – 6.5% this year.