Salaries in Saudi Arabia to increase this year
Over the past year, 1.12 million jobs were created in the private sector
Dubai: Salaries in Saudi Arabia are expected to rise by an average of 6 per cent in 2024, a report revealed this week.
The projections comes amid the Kingdom’s efforts to diversify its economy away from hydrocarbons, as part of its Vision 2030, and demand for talent continues to increase.
According to recruitment specialist Cooper Fitch, development remains a major focus for Saudi Arabia. $500 billion (Dh1.8 trillion) city Neom, the Red Sea Project, and AlUla are all recent mega projects developed by the Kingdom that have increased the demand for talent..
Over the past year, 1.12 million jobs were created in the private sector as part of the plan to develop more than USD 1 trillion (Dh 3.67 trillion) worth of projects, the Ministry of Finance said in its 2024 budget statement.
Women in the workforce
“Women’s participation rates in the labour market rose steadily, as the rate increased in the second quarter of 2023 to reach 35 per cent, exceeding the Saudi Vision 2030 goal of 30 per cent,” the ministry added in the budget report.
As women enter the workforce at a steady rate, the hiring boom is expected to continue this year. The rise reflects the importance and success of women's participation in the workforce.
Visa schemes
Saudi Arabia launched five visa categories for skilled professionals and investors aiming to create employment opportunities and increase knowledge transfer. The new visa categories are special talent, gifted, investor, entrepreneur, and real estate owner residency visas.
Salary increases will depend on the sector, employee productivity, and the company’s salary budget, the study found. More than half of companies surveyed intend to increase salaries in 2024, according to the Cooper Fitch study.
The survey found that approximately 60 per cent of companies will increase their headcount in 2024, and 29 per cent will reduce their workforce.
“In line with the realisation of Vision 2030, 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,” says Vilius Dobilaitis, managing partner of finance, sales and marketing at Cooper Fitch.
Will companies pay annual bonuses in 2024?
78 per cent of companies that responded to the Cooper Fitch survey plan to issue annual bonuses based on their 2023 financial performance, compared to the 22 per cent that will not be paying bonuses.
Of the companies that will pay bonuses, 24 per cent will give staff a one-month boost to their salaries, 21 per cent will pay two months and 18 per cent are planning a three-month bonus.
Most of the companies that will not be paying bonuses operate in the fields of construction and consulting.
What benefits can employees expect?
While mandatory benefits in the Kingdom include health insurance, paid leave and the end-of-service gratuity, there is an increasing focus on well-being, workplace savings, education, child education allowances and flexibility, according to a survey conducted by Swiss insurer Zurich International Life.
About one in four employees have switched jobs in the past year, attracted by better remuneration, enhanced employee benefits and professional advancement opportunities.
84 per cent of respondents claimed that they would change jobs for a new role with the same pay but better benefits.
What are the most in-demand sectors for jobs?
Roles such as patient care technicians, information system analysts, building information modelling coordinators, health and safety managers and human resources operations specialists have emerged as the fastest-growing jobs in Saudi Arabia, according to a survey by professional network LinkedIn.
There has also been substantial growth for real estate consultancy services in Saudi Arabia, according to recruitment specialist Michael Page.
“KSA’s demand for these services has exhibited consistent year-on-year expansion, prompting a corresponding surge in activity among major real estate consultants, who have been augmenting their local teams to better address the evolving needs of their clients,” Michael Page says in its 2024 UAE salary guide, which compares the two markets.