MENA salaries to rise despite low oil price

Businesses are forecasting salary increases between 4% and 10%

Vijay Gandhi.
Vijay Gandhi.

Latest data from Hay Group’s research reveals that despite the fall in oil price, businesses in the Middle East and North Africa are forecasting salary increases between 4% and 10%. Vijay Gandhi breaks down the numbers.

The sudden drop in oil prices has certainly come as a surprise, but hasn’t immediately impacted business plans for organisations in the Gulf region. Most governments have chosen to continue with development plans and spending on ongoing infrastructure projects. Overall, economic projections have not seen any reforecasting yet. However, new project decisions may have slowed down and few select economies are announcing a reduction in public spending.

The oil producing countries of Africa such as Libya, Sudan, Angola and Nigeria are seeing a relatively larger impact and these economies may slow down because of their higher dependence on oil dollars. Some organisations in Libya have confirmed that they are revisiting salary plans in response to decreased revenues.

The increased cost pressures will force organisations to improve productivity through workforce planning, good performance management processes focusing on variable pay, investment in skills development programs and increased employee engagement.

Being expatriate driven, salary packages in the Gulf region are heavily weighted toward cash living allowances of 25% – 40%. These simply don’t exist in the Levant and African countries and it isn’t likely to change anytime soon.

There is abundant labour at the semi-skilled and skilled level, however, pay at the managerial level in countries like Angola & Nigeria is greater than similar jobs in Europe and United States. Remuneration has to work hand in glove with talent management.


  • Despite vastly varying economic factors, countries in the MENA region share a commonality- stronger growth projections than the global averages.
  • GCC economies today provide employment opportunities to the rest of the region, whilst African countries offer significant investment prospects for the established business of the Gulf region.
  • Gulf countries are focused on developing their local businesses by making sure top leadership is effective. Certainly, this agenda also is to ensure fast track development for country nationals as the nationalisation pressure continues.
  • In Jordan and Lebanon the priorities are different – geopolitical uncertainty within and with their neighbouring region is contributing to large-scale emigration to the Gulf; and businesses are left struggling to retain top talent.
  • Organisations in Tunisia, Morocco and Algeria are facing a similar struggle with qualified and experienced talent being increasingly scarce, despite high unemployment rates.
  • Meanwhile in Egypt, North Africa and Libya businesses are facing high inflation and an intense war for talent resulting in large pay variances between organisations.



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