Projected salary increases in Saudi Arabia: Optimistic outlook for 2020

November 20, 2019

Saudi Arabia, Riyadh


  • Overall salaries projected to increase by 4.5% in Saudi Arabia across industries in 2020
  • Voluntary turnover has increased to 9%, signifying a more active job market

Riyadh, 20 November 2019: Mercer, a global consulting leader in advancing health, wealth and careers, and a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC) today announced an overall increase of 4.5% in the base salary in Saudi Arabia, according to its annual Total Remuneration Survey (TRS).


Mercer’s TRS research of over 472 companies in the Kingdom also revealed the annual salary increase is forecasted to grow a further 4.5% in 2020, with the highest increase shown in the life sciences industries at 5%. While forecasts vary across specific industries, the strongest push is likely to come from the life sciences and high-tech industries. The energy industry continues to see some of the lowest increase in salaries with a projected 3.5% increase in 2020, compared to a 3% increase in 2019. Notably, companies are providing higher increases to executives and managers than they are to other employee levels, signalling increased focus on leadership skills.


Basem Samara, Career Products Leader, Mercer in Saudi Arabia, said: “It is very encouraging to see that a large segment of Saudi employers are looking to increase salaries in 2020. This is a reflection of a resilient and optimistic economy. Saudi is constantly looking at new approaches to further progress and develop the workforce. In addition to annual increases in base salary, we have noticed an increasing number of talented Saudi youth being placed in leadership positions. This is key in creating a sustainable economy.”


Overall, inflation and unemployment rates in Saudi have continued to decline overtime creating a positive impact on the Kingdom’s GDP growth, which is forecasted to steadily increase in the coming year. Furthermore, voluntary turnover rate has increased to 9% in 2019, from almost 7% in 2018, demonstrating an active job market. According to the survey, the overall hiring outlook in Saudi is also positive with 52% of respondents planning to increase their headcount and 38% looking to maintain headcount in 2020.


“With a young demographic, there is a significant amount of movement in jobs in the Saudi workforce. To ensure business continuity, organizations must build attraction and retention mechanisms that cater and are tailored to these demographics. We are seeing that leaders of many organizations are looking to enhance the employee experience as a retention tactic given the fierce competition for talent in the market. The contractual agreement between employers and employees will always have a significant weight, however, this is no longer sufficient. Employers must consider how they are perceived by their employees as an enabler to fulfill their professional and personal ambitions. This is crucial in keeping young talent engaged and motivated and will play a role in driving performance,” added Samara.


The TRS was launched regionally in 18 countries across the Middle East and North Africa region. In Saudi Arabia specifically, more than 470 organizations were surveyed in the manufacturing, retail and wholesale, services, chemicals, life sciences, high tech, energy, and other industries.


About Mercer

Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 83,000 colleagues and annual revenue of over $20 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit Follow Mercer on LinkedIn and Twitter.