Introduction

Saudi Arabia’s economy is expanding rapidly, and Cooper Fitch expects development and diversification to continue swiftly in 2023. Alongside the progress of mega and giga-projects, with work on built assets and infrastructure now commencing, there is a parallel drive to grow the Kingdom’s technology industries. The electric vehicle (EV) sector represents a prime example, with confidence in the market continuing to grow globally. KSA is set to become home to two of the world’s largest EV manufacturing facilities within the next two years.

From a macro perspective, Saudi Arabia’s Public Investment Fund (PIF) looks likely to accelerate its diversification-related investments in 2023, thanks in no small part to a record budget surplus of $39.9 billion posted in the first nine months of 2022. With the coffers full, Saudi leaders will have a greater capacity to attract the talent required to realise their vision.

Based on the recruitment trends we have seen in the market, plus the responses used to compile this guide, Cooper Fitch therefore expects salaries in KSA to increase by just over 3% in 2023.

Bonus Outlook

This year, Cooper Fitch asked whether respondents expected to pay annual bonuses based on their organisations’ financial performance in 2022. A staggering 81% of those surveyed reported their intention to deliver annual bonuses. For context, only 68% of respondents to our 2022 survey planned to pay bonuses based on their financial performance in 2021.

Of those intending to issue payouts, the most significant proportion (26%) expect the amount to come to one month’s gross salary. Approximately 17% of respondents plan to pay two months’ gross salary, 19% said three months, 8% said four months, and 2% said five months. One in 10 employees working for the firms surveyed can expect annual bonuses amounting to six months’ gross salary. Industries represented in this category include aviation and aerospace, banking, financial services, investment management and government relations.

Of the 19% of companies that do not intend to pay bonuses based on their 2022 financial results, the highest proportion hailed from construction, which is surprising given KSA is outperforming the wider Middle East and North Africa (MENA) region in this sector. In fact, as of October 2022, Saudi Arabia commanded a 35% market share with $31 billion of contract awards, according to research published by JLL in December. While wider macroeconomic factors are posing challenges for construction outfits around the world, companies that deliver bonuses now will be better placed to retain talent amid increasing recruitment-related competition.

To ensure the highest possible accuracy of this year’s bonus-related information, Cooper Fitch surveyed senior- level representatives from businesses across multiple sectors. The largest proportion of respondents (28%) were managers, followed by professionals working in the field of HR (22%). Two-fifths of respondents (40%) were directors and C-level professionals, with an equal split between the two segments.