Business | Economy
Saudi Arabia tops world in take-home pay
While senior executives in the Gulf see the UAE as the most desirable place to work due to its liberal lifestyle, it is Saudi Arabia where they can have more disposable incomes.
- By Shakir Husain, Staff Reporter
- Published: 23:43 August 10, 2007
- Saudi Arabia and the UAE topped the list of places that offer managers the highest purchasing power, according to a recent survey by consultancy firm Hay Group.
- Image Credit: Gulf News
Dubai: While senior executives in the Gulf see the UAE as the most desirable place to work due to its liberal lifestyle, it is Saudi Arabia where they can have more disposable incomes.
However, both Saudi Arabia and the UAE topped the list of places that offer managers the highest purchasing power, according to a recent survey by consultancy firm Hay Group.
"Managers in Saudi Arabia and the UAE enjoy soaring levels of take-home pay, as employers in this region pay more attention to cash rather than performance-based incentives," said Vijay Gandhi, reward information services manager at the group's regional office in Dubai.
Top executives in Saudi Arabia enjoyed annual disposable incomes of $229,325 compared to $223,939 for their counterparts in the UAE.
Gandhi said the start up of a significant number of new entities, growth in free zones, overseas expansion of local entities and entry of new players from outside the region have all put pressure on the labour market for top executives.
Although the gap in their purchasing power is narrow compared to UAE pay packages, managers in Saudi Arabia enjoy much higher saving potential because of lower cost of living compared to the UAE.
"Because of the higher cost of living you have to be really rich in the UAE to enjoy the tax-free advantage. People in Saudi Arabia have a higher saving potential," said Eckart Woertz, an economist with the Gulf Research Centre in Dubai.
But despite inflation eroding people's ability to save money, the UAE remains attractive to expatriates because its offers them "a liberal lifestyle, opportunities for leisure, and safety," Woertz added.
Several major employers have introduced new incentives like higher bonuses to retain their staff. "In an environment of high cost of living and shortage of key talent, there is also considerable interest in introducing long-term incentives," says Gandhi.
In general, managers in emerging economies are enjoying higher levels of buying power for their pay than their counterparts in advanced economies such as Britain, the US and other countries in Western Europe, Hay Group's World Pay Report showed.
The continued high economic growth in markets like Russia, Turkey and Mexico is seen creating "unprecedented demand for senior talent," it said.
Similar to the situation in the UAE, a shortage of talented top company executives is driving up salaries at those levels in those countries.
"Switzerland, Germany and Ireland are the only European countries to make it into the top 20 countries for management buying power, with the US lagging at 24th and the UK at 40th," the report found.
The firm studied people on top of management ladder, typically finance manager, manager (information technology) and head of human resources, and took into account the cost of living and taxes in 46 countries.
China's rapid economic development is reflected in growing disposable incomes that averaged at $126,281, placing the country 14th in the world pay table.
However, despite India's impressive economic performance, managers in the country were still not well-compensated in comparison to their Chinese counterparts.
Have your say
How much of your income do you spend? What do you usually spend your money on?
Your comments
I worked in Saudi Arabia for about four years and have now been in Dubai for the past eight years. I totally agree with the fact that I used to save a lot more in Saudi Arabia than I could save in Dubai. But on the other hand I am living my life to the fullest in Dubai. Thanks to the government of the UAE for being so liberal and for giving us the opportunities to enjoy a tax-free state which is full of leisure, safety and a rich lifestyle. Everyone has to compromise that if you want to live the life to the fullest; you have to pay a price. So enjoy it while you are here and stop complaining.
Faiz
Dubai,UAE
Posted: August 11, 2007, 15:10
With the forbiddingly high and ever increasing standard of living in Dubai, I think a hundred times before visiting any mall or purchasing anything, no matter how necessary or inexpensive it is. I miss those days when I would enter with two hands and come out of the malls wishing I was an octopus with several arms to carry the bags...
Sudha
Dubai,UAE
Posted: August 11, 2007, 10:06
There is something terribly wrong with the Hay report. The UAE may be a liberal country but it doesn't mean that the purchasing power parity (PPP) is competitive enough to attract the best talent!
Abe
Sharjah,UAE
Posted: August 11, 2007, 09:09
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