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Compensation and benefits to stay stagnant in 2018
March 31, 2018, 4:20 pm

A new report on compensation and benefits in Gulf Cooperation Council (GCC) states reveal that 2018 could turn out to be yet another year of conservative and cautions strategies on compensations and benefits (C&B).

The study by Informa Middle East, a leading business intelligence firm operating in Knowledge and Information, predicts that lower level salary increases are significantly down, with 20.96 percent of companies expecting to give only a 3.5 percent increase or less. Around 10.5 percent of companies expect to implement pay freezes and 3.36 percent 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 programs.

The specter of VAT implementation is also adding to the caution permeating 2018’s C&B landscape. The majority (58.58 percent) of companies will not consider VAT when deciding whether to increasing salaries in 2018/2019, while only 14.48 percent said that VAT would be an influencing factor. The remainder (26.96 percent) is 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 percent of participants in the study. This was closely followed by 'improving employee retention', which was up 41.18 percent.

To satisfy these focus areas, more companies are investing in training and development programs, 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 percent expect to increase salaries by between 5 to 6.5 percent this year.

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