The Nitaqat program and the rising costs of living in the Kingdom have contributed to the steady growth in the salaries of Saudi citizens, a global consulting firm said Tuesday in a press release, quoting its annual report. Hay Group, which released its annual report this week, sees steady salary growth in the Kingdom over the last 12 months, and forecasts another solid 12 months of growth ahead. The average increase is predicted to be 5 percent for the Kingdom which will see pay movements converging with inflation rates, it said. “The report shows that Saudi nationals are paid 13 percent higher than the general market average when we look at total cash. Pressures on organizations to achieve their target quota of Saudi nationals are apparent in the trends we see in the 2011 report which is part of a wider socio-economic story,” said Chance Wilson, General Manager of Hay Group in Saudi Arabia. “Compared to five or even three years ago Saudi nationals are much more in demand and are now in the favorable position of being able to pick and choose between employers,” he said. Wilson said that expatriate workers also shape the pay market. “Another dynamic driving salary movement is the escalating cost of hiring expatriate workers. Because of rising living costs, recruiting and re-locating a skilled expatriate worker is expensive when you consider housing and schooling in a city like Riyadh. Companies cannot afford the mobility allowances they used to,” he said. “As the full force of the Nitaqat program comes into play, we are likely to see more favourable reward packages offered to Saudi nationals in comparison to the overall market,” Wilson added. More than 250 organizations in the Kingdom including those in the public sector, banks, and oil, gas and petrochemical companies contributed to this year's report which analyses salary information for almost 240,000 employees comprising both nationals and expatriate workers. Wendell D'Cunha, Manager of Reward Information Services at Hay Group, said that increases this year have been marginally lower than forecast but still in line with inflation. “This time last year we forecast a 5 percent increase in basic pay for 2011. The actual average salary increase is 4.4 percent. However, there are significant differences depending on industry sector and nationality. Including allowances, the average guaranteed cash package has increased by 7.5 percent on average for Saudi nationals,” he said.
