Firms predicting average salary increase of 5.6%

By Santhosh V. Perumal/Business ReporterCompanies in Qatar are predicting an average salary increase of 5.6% in 2014, a figure in line with forecasts made in 2013, indicating stability and an ongoing confidence in the business environment amongst organisations in Qatar, an Aon Hewitt annual survey said.The figure comes at a time when the country’s economy is growing, with economists expecting an increase of 5% for 2013 and 4.9% in 2014, painting stable outlook for Qatar, the survey said.“Our latest predictions indicate that organisations in Qatar are increasingly confident in the growth of the country’s economy, which is moving in a positive direction,” said Robert Richter, compensation survey manager, Aon Hewitt Middle East.Having seen a clear correlation between performance and salary increases and whilst linking individual performance to pay is not uncommon, he said it would advise employers to use annual bonus payments as the larger component for rewarding high performers.Salary increases typically take into a consideration a number of other factors as well as performance, including inflation, to reflect promotions, and the need to ensure employees at the same grade remain within a single pay band, he added.Qatar’s cost of living, based on consumer price index, grew 3.10% year-on-year in August, according to the latest figures released by the Ministry of Development Planning and Statistics.Based on data from a robust comparative group of over 500 organisations across the Middle East, including 50 in Qatar, the report offers a unique snapshot of salary increase trends which, in turn, enables them to benchmark their forecasts with the market in order to remain competitive.Among the participating GCC (Gulf Co-operation Council) organisations, Saudi Arabia based companies gave the highest salary increase projection for 2014 at 6%. This is a slight increase on last year’s 5.8% predicted raise, it said.Those based in the UAE predicted the lowest salary increase at 5%, which is in line with last year’s predictions of 5.1%, indicating stability, the survey said.Kuwait and Oman both estimated a 5.6% salary growth, similar to the 2013 predictions, while companies in Bahrain forecast 5.2%, an increase on last year’s 4.7% projection.“Looking back to 2012 and comparing the predictions from the survey for 2013 (5.4%) with actual rises awarded earlier this year (5.3%), we see good alignment, allowing employees to feel confident the trend is set to continue into 2014,” it said.