Employers across the GCC are significantly more confident of offering salary increases than they were 12 months ago, according to an influential regional survey of wages and hiring intentions.

The Hays 2018 GCC Salary and Employment Report found that 68 per cent of businesses expected to raise salaries in the year ahead, compared to just 39 per cent over the past two years. The results suggest a renewed confidence in the labour market after a number of years of sluggish growth.

In total, 39 per cent of staff recorded a pay rise last year, said Hays, but 9 per cent saw their earnings decline and the majority (52 per cent) stayed the same.

“The results are indicative of more prosperous market activity for 2018,” said Chris Greaves, managing director of Hays Gulf region. “We are noticing an uplift in hiring activity across certain sectors, which will have a positive effect on salaries for a number of working professionals.

“However, given the increasingly competitive nature of the market and challenging conditions of the past two years, employers do remain cautious with regards to their budget spends and the salaries they can offer.”

Employees are just as confident on salary, with 59 per cent expecting an increase this year, though they are more optimistic than employers on how large this will be.

“It is impossible to predict salary trends for the whole market as they will be very much dependent on individual roles and the expertise required,” said Greaves. “However, we do expect trading conditions to improve over the next 12 months and pay increases may well be more common practice than in 2017.”

Hays said hiring among HR professionals picked up towards the end of 2017, and 30 per cent of practitioners started a new role over the course of the year. It highlighted professional services, oil and gas and construction and engineering as notably buoyant sectors, but was less optimistic about healthcare, where it noted fewer institutions were opening or expanding. Compensation and benefits and talent management were found to be the most in-demand specialisms.

The most common salary increase among HR professionals was 5-10 per cent last year, the report found, but 62 per cent expect a pay rise in 2018 compared to 54 per cent last year.

More than a quarter (27 per cent) of HR respondents to Hays’ survey expected to move to a new job within the next six months, with 59 per cent overall confident about their career prospects for the year ahead.

Last month, economists sounded a note of caution over pay in the UAE, pointing out that the introduction of VAT in the country this year could lead to many employees experiencing a real terms pay cut. Korn Ferry said a 4.1 per cent average pay rise could feel like a 0.5 per cent cut when inflation is factored in.