Middle East employees can look forward to an average 5.4 per cent raise in pay for 2013 resulting in a real pay growth as the predicted increases are well above inflation rates, said a report.

The latest Total Remuneration survey conducted by Mercer, a global consulting leader in talent, health, retirement and investments, coincides with the Salary Movement Snapshot, which tracked pay plans of 570 multinational organisations operating across 76 countries in Europe, Middle East and Africa (EMEA).

The data provides information from multinationals on median base pay increases across all employee groups including ‘blue’ and ‘white collar’ workers up to management and the senior executive level.

The Middle East and Africa has the largest variation in forecast pay increases due to the diverse nature of the region, the report said.

Companies in Morocco (4.9 per cent), Tunisia (5.3 per cent) and Algeria (6.8 per cent) are predicting high pay increases to employees compared to those in Western Europe, while employees in Egypt and South Africa are anticipated to receive 10 per cent and 7 per cent, respectively.

Companies in Africa are anticipating average increases of 8 per cent and companies in the Middle East expecting to give employees increases of 5.4 per cent in 2013.

General salary increase expectations in the GCC region range from 5 to 6 per cent, UAE (5.0 per cent), Bahrain (5.0 per cent), Oman (5.1 per cent), Qatar (5.2 per cent) and Kuwait (5.4 per cent), while Saudi Arabia is anticipated to enjoy the highest increase in pay of 6 per cent in 2013.

These figures have remained relatively unchanged over the last couple of years, a sign of the region relative economic stability and mature business environment.

Zaid Kamhawi, Middle East business leader for Information Product Solutions at Mercer said: “Anticipated pay increases are affected by consumer price inflation, the anticipated pay increase in 2013 are predicted to be above the forecasted inflation generating real pay growth for employees.”

"Companies however are placing less emphasis on inflation rates when budgeting for pay increases, and factoring such variables as relative pay competitiveness, affordability, labour market conditions and confidence in their business outlook.

“In 2012, like in other regions, we saw the introduction of salary freezes in a number of Middle East markets. Our forecast shows that an estimated 5 per cent of companies will look to freeze salaries in 2013 across the region. The Middle East region showed the lowest and healthiest figures across the ME and Africa region in terms of salary freezes,” he added.

The picture is varied across EMEA, with rates of pay inflation for workers in other parts of Europe outpacing that of employees in Western European nations. Across Western Europe, on average, companies are predicting employee pay rises of 2.6 per cent in 2013, marginally lower that the average of 2.7 per cent awarded in 2012.

By comparison to Western Europe, the rates of pay increases in Central and Eastern Europe are much higher at 4.6 per cent, the report said.

Multi-nationals may have smaller operations in many of these countries and currency considerations may mean that even though the increases appear high, they may not actually translate into a large cost for multinationals.

“The figures provided are figures which Compensation and Human Resource Managers – those responsible for planning salary increases – are forecasting in each country. These forecasts, of course, have to be approved by company management and depend on numerous economic factors, as well as an individual employee performance,” said Kamhawi. – TradeArabia News Service