Saudi Arabia Salary Guide 2021
Pandemic mutes hiring in 2020, but companies look to renewed growth in 2021.
The Covid-19 pandemic disrupted the jobs markets in the Kingdom of Saudi Arabia in 2020, forcing companies to delay decisions on hiring new staff and awarding bonuses and pay rises.
However, despite persistently high levels of market uncertainty, fewer firms than expected said they made redundancies in 2020, and basic salary ranges and performance goals remained unchanged.
In both markets, well over a quarter of organisations interviewed said there had been no changes to their recruitment practices in 2020, and that they were hiring for replacement positions.
And more than half of organisations interviewed in both markets said business activity was either busy or had started to pick up by the fourth quarter of 2020, pointing to a resurgence in sentiment and growth as we enter the new year.
These were the main trends that emerged from Cooper Fitch’s latest annual Salary Guides for the Kingdom – this year conducted against a backdrop of significant market disruption due to the Covid-19 pandemic.
At Cooper Fitch, we have adjusted the usual format of our Salary Guides to improve the accuracy and quality of the data we are presenting while market conditions remain uncertain. We spoke to around 200 of our clients based in the Emirates and a further 200 based in the Kingdom and asked them a range of questions about recruitment activity, such as hiring trends, bonuses and salary movements for both executive and mid-level staff, to enable us to create the most reliable outlook possible for the year ahead.
The guides summarise our expectations for salaries and recruitment trends for 2021.Download Guide
- 79% of companies reported no redundancies in 2020
- 56% said the business had started to pick up by Q4 2020
- 23% implemented a hiring freeze across all roles in 2020
- 22% of respondents said that only essential roles would be replaced
- 37% said they would implement a merit salary increase for staff in 2021
- 41% of companies said they would pay bonuses for 2020, but 24% were undecided and 34% said they would only partially pay them, or not at all
- 35% said there would be no changes to existing staff salaries in 2021
A sizeable proportion of KSA firms said they would increase salaries in 2021, but many were not sure, and an even greater percentage had yet to decide whether to pay 2020 bonuses. Respondents’ priorities for the year ahead were to finalise the 2021 budget and make bonus decisions, followed by contingency planning and ‘manpower planning’, which means hiring new staff and addressing skill gaps.
Technology, advisory and financial services firms performed the strongest amid a challenging 2020, while real estate and the public sector struggled the most, our survey showed.
Trefor Murphy, chief executive and founder of Cooper Fitch, said: “The key finding from our Salary Guides is the continued high level of uncertainty among businesses. We believe this trend will prevail until the factors that are negatively impacting the market – lower oil prices, the after-effects of the pandemic, and so on – gradually improve throughout 2021.
“Many of the companies we surveyed have some big decisions to make at the start of 2021, as a significant proportion had yet to decide if they would implement a merit salary increase for staff next year or payout agreed bonuses for 2020. Our advice is to make these budgetary decisions now, to give your organisation as much clarity as possible on how its operations will function, as we enter the new year.”
Murphy added: “Despite the challenges both locally and nationally, we believe that the Kingdom is extremely resilient markets with good bounce-back power.
“We also have the prospect of an approved Covid-19 vaccine on the horizon, which should further invigorate business and consumer sentiment and positively impact the recruitment market in 2021.”
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