Kuwait's salary increases and bonuses were the lowest among GCC countries, according to Procapita Management Consulting's first annual report for 2022. For the first time, the survey covered the entire region, which was published in Al Qabas, and 67.2 percent of respondents, which included more than 750 establishments across a range of sectors, expected an increase in employment rates in 2023. According to the survey, Saudi Arabia and Qatar experienced the largest employment rate increases, while Kuwait ranked last.
According to Procapita CEO Muhammad Abu Al-Rub, the number of facilities and experts that participated in the survey this year was three times higher than last year. Moreover, based on the main observations of the study, 84.6% of the participating establishments granted annual increases to employees in 2022, which is a unique contribution to companies, human resources professionals, and specialists. Saudi Arabia granted annual increases by 88 percent, while Oman and Kuwait recorded the lowest by 63.1 percent. In honor of employees’ efforts, 62.7 percent of the establishments paid annual bonuses in 2022. Saudi Arabia topped with 83 percent, Oman the least with 51 percent, while Kuwait ranked third.
Moreover, 39.6 percent of the companies are expected to either increase salaries or bonuses, while 40.5 percent of them intended to increase salaries and bonuses, with Kuwait recording the lowest percentage compared to its peers. On the other hand, 19.9 percent of the participants and business leaders indicated that there is no intention to pay annual increases or bonuses in 2023, as the struggle for talent requires them to provide comprehensive, competitive compensation and financial benefits.
Meanwhile, participants who plan to update and develop the structure of job grades and the wage scale to match inflation rates in 2023 constitute 45.3 percent. Respondents that provide at least one type of non-monetary benefits to their employees totaled 89.7 percent, as private medical insurance services are still the most common with 82.5 percent, followed by flexible working hours with 55.6 percent. Kuwait was the least among the countries in applying this policy.
Further, 31.9 percent of the respondents provide long-term incentive plans to their employees that give them long-term incentives to keep talents and leaders. Deferred Bonus/Cash accounts for the highest percentage at 41.8 percent, followed by Phantom Stocks at 33 percent. On the other hand, Procapita also revealed that Kuwait recorded the lowest percentage among GCC countries in implementing the remote work policy, at 51.4% percent, while the UAE recorded the highest percentage at 87 percent.
Procapita said that the average number of board members in the GCC countries in 2022 is ten individuals, while the total average of their remunerations amounted to about USD 3.16 million, as the listed establishments distribute about 1.45 percent of their profits as an allowance for board remuneration, while maintaining the average member cost is fixed at USD 337,000.In addition, the report stated that Kuwait witnessed the employment of national workers, in which between 12,400 and 13,000 new jobs were created in the public and private sectors in 2022.
Some sectors are also expected to recover and increase employment rates in 2023, including the health care, oil and gas, as well as the construction and infrastructure sectors. Based on the results of the survey, the most important factors that affected the supply and demand for competencies in the Gulf labor market were represented by legislation and regulations, in addition to changes in the sectors targeted for investment, and Emiratization policies may affect the demand for certain specializations, while legislation related to employment abroad can affect supply.
The survey mentioned that 71.5 percent of the participants stated that compensations and benefits are the main reasons behind employees quitting their jobs, which according to the report is the reality of the labor markets in the Gulf countries which are based largely on financial benefits, leading to conflicts over attracting talents in multiple sectors.
However, the percentage of employees who left their jobs to start their own businesses was much higher than those who quit for flexible job opportunities, which for Kuwait and Bahrain is in line with the government’s efforts to enable entrepreneurial activity. In addition, 53 percent of the participants indicated that the main employment challenges are that the local labor market does not provide the required skills, as 78.3 percent of the participants relied on outsourcing due to the lack of talents and special skills in the labor market.
Moreover, 80.3 percent of the participants stressed the importance of analyzing and measuring the experience of employees in creating a healthy work environment that preserves talents, while 63.5 percent reported that employee satisfaction is the most common way to evaluate staff experience and expertise. Meanwhile, 27.7 percent apply the employee health and well-being questionnaire periodically, and 19.5 percent seek to evaluate the culture of the establishment to create a healthy environment that retains talents.
According to the ZENITHR database specialized in measuring and analyzing employee experience, the average job integration rate for various sectors in the MENA region is 81.5 percent, with retail and financial services sectors recording the highest rates, while manufacturing and real estate sectors record the lowest rates.
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