RIYADH, September 22, 2021 — Employers in the KSA plan to give their staff an average annual pay rise of 4.3% in 2022, amidst signs of strength in the labour market following the turmoil of the global pandemic, research by Willis Towers Watson revealed today.
The rise is an increase on the 3.3% average increase paid this year and, with inflation forecast at 2.3% next year, would leave a 2% real-terms gain. In a further sign of optimism, the proportion of businesses expecting to freeze pay altogether is set to tumble from 11% this year to almost zero (1%) in 2022.
162 firms in Saudi Arabia took part in the authoritative Salary Budget Planning Report by Willis Towers Watson (NASDAQ:WLTW), a leading global advisory, broking, and solutions company.
Some industries plan to be more generous than others. Average rises in 2022 are set to be higher in the pharmaceutical and medical technology (5.0% rise), manufacturing (4.8%), and high tech (4.4%) sectors. Workers in consumer products (3.9%), energy and natural resources (3.8%), and financial services (2.7%) are due to fare less well.
The war for talent has continued during the pandemic. In 2021, Saudi businesses tried to motivate and retain the top performers by giving them a pay rise that was 2.6 times greater than for staff on average performance ratings.
Kerem Tuzlaci, Senior Reward Leader, Willis Towers Watson Saudi Arabia, said: “Underpinned by the structural changes and investments of the government in Saudi Arabia, Vision2030 transforms and diversifies the economy. Based on this transformation, Saudi Arabia remains a major market in the region and a centre of attention for multinational companies. With this regard, among the Vision2030 organizations, local and multinational companies, HR strategies become the cornerstone of success. In parallel our research shows that as an HR strategy companies are significantly differentiating how they reward their top performers compared to average performers.
“Our research also shows an increase of average salary budgets for 2022, driven especially by the pharmaceutical, medical technology, manufacturing and high-tech industries.”
The study revealed other clear signs of optimism and recovery among employers. Half (50%) of Saudi firms said their business outlook is ‘ahead’ or ‘well ahead’ of where they thought it would be, while almost all the remaining companies report that business outlook is in line with their expectations (49.5%).
And 26% plan to recruit more staff in the coming 12 months, while 11% expect to cut headcount. Over half (61%) of firms that are recruiting said they are trying to fill roles in sales, while technical skilled trades (47%), engineering (40%) and information technology (26%) are also hotspots.
Kerem Tuzlaci added: “Being a major consumer market in the region, sales and manufacturing are the top jobs for recruitment efforts. However, it should also be noted that information technology and digital roles are a focus for attraction and retention in this transforming economy. Our research show that information technology and digital roles are enjoying enhanced total pay packages and we expect this trend to continue or even accelerate.”
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