Salaries in the Kingdom are expected to increase by 6% this year, recruitment agency Cooper Fitch said in its Saudi Arabia 2024 Salary Guide. The forecasts reflect growing demand for skilled professionals as the Kingdom’s non-oil private sector continues to grow at a red-hot pace. The analysis is based on recruitment trends seen in the market and responses by the business community to a survey compiled by Cooper Fitch.

Driving growth: “Saudi Arabia’s portfolio of gigaprojects and the development of new industries such as electric vehicles have positively impacted recruitment and remuneration over the past year. Industries across the Kingdom are expanding, along with major cities such as Jeddah and Dammam,” Cooper Fitch Managing Partner Vilius Dobilaitis said.

Nearly half of the surveyed companies raised salaries last year, with c. 9% saying they increased salaries in excess of 10% to help retain employees amid growing competition for skilled staff.

52% of companies surveyed added staff in 2023, while nearly 30% trimmed headcount. Only 21% of companies downsized their workforce the year before, while 57% expanded it.

But what about this year? Nearly 52% of respondents plan to raise salaries this year, reflecting “the widespread need to attract and retain employees capable of delivering on the nation’s ambitious economic targets.” Only 22% said they plan to trim salaries this year. 57% of respondents will grow their workforce this year, while 29% will make cuts.

Everyone loves a bonus: More than 78% of surveyed companies will pay bonus comp if their financial performance makes it possible, the report showed, with most of the respondents planning to offer a bonus equivalent to one month’s basic salary, it said.

You’ve struck gold if you’re in the consulting, finance, investment management, real estate, or telecomindustries with a bonus of up to six months’ basic salary in the cards, the report showed.

Construction and property companies are the least likely to offer bonus comp, the report showed. “This is unexpected given the unprecedented levels of development currently taking place in Saudi Arabia, as the nation pushes ahead with a slew of large- scale projects related to Vision 2030,” the recruitment specialist said.

The labor market is a little bit tight: Nearly 26% of surveyed employers are concerned about finding talent to meet hiring demands for this year, the report showed, with management and leadership accounting for the most notable talent gaps.

Regulation has largely been on-point: Over the past year, the government has implemented various measures to strengthen its recruitment sector, according to the report. The Human Resources and Social Development Ministry expanded last year its Skill Verification Program (SVP). It also unrolled in August new regulations to enhance standards among recruitment agencies operating here.

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