Saudi Arabia’s salaries rose despite lower oil revenue in 2015

Salaries in Saudi Arabia, the world’s biggest oil exporter, have risen at a rate higher than inflation this year, but remained below a five percent forecast, according to data from Hay Group, a consultancy firm.

Despite the drop in oil revenue, wages have increased by 4.5 percent, 1.9 percent above the inflation rate, while the gap between senior executive pay and entry level employees continued to widen.

“The difference between salaries of senior executives and entry level workers has grown more slowly than in other parts of the Middle East,” Wendell D’Cunha, Hay Group’s regional manager for services, was quoted as saying in the research note.

“However with the average head of department earning 7.3 times more than the average entry level staff member; Saudi Arabia is still well above the regional average in this regard,” he added.

Businesses predicted that salaries would rise by five percent next year despite the uncertain economic conditions and falling oil prices.

Bankers had the highest raises, with a 7.1 percent increase, the research showed. The banking and retail sectors have paid the highest bonuses as they are performance-driven sectors.

Women, who represented five percent of the employees surveyed, have made ten percent above the average industry level as they generally hold positions at higher levels and are hardly present in the larger, low-paid labor force segment. 

Employers, however, are struggling with retaining staff, especially in the insurance sector where the turnover was almost 40 percent this year. In the retail sector the turnover was 25 percent.

About 50 percent of those surveyed were in the job for five years, while 17 percent have spent less than a year in their current positions.

The research is drawn from Hay Group’s annual Compensation and Benefits Report for Saudi Arabia, which measures salary payments made by 482 companies, representing 430,000 employees in the kingdom.