Introduction

Employment and job creation remain the hottest issues in the Middle East, including
in the six countries of the Gulf Cooperation Council (GCC).

This research report, produced by online recruiting firm GulfTalent.com, summarises
the status of the employment market and forecasts key trends to be expected during
2012.

Employment and Salary Trends in the Gulf is published annually since 2005 and is
the premier publication on employment trends in the Gulf region.
1
GulfTalent.com 2012. All rights reserved.
Online Survey of
Employers
This report is based on in-depth research from a wide array of sources
Selection Criteria
Online Survey of
Candidates
Source
Interviews with Top
Managers
Professionals employed by 3,000 largest corporations in the GCC
Aged 22-60 years
Earning an annual income in the range USD 12,000 - USD 200,000
Employing 50 to 20,000 staff
Across all major industries
Mix of private sector local and international companies
Across all major industries
Based in the 6 GCC countries
(Saudi Arabia, Qatar, Kuwait, Bahrain, Oman, UAE)
News & Research
Relevant reports from the press and news sources across the region
Macro-economic sources
Research Methodology
Participants
35,000
professionals
2,100
Executives &
HR Managers
60
Senior
Executives
2

Economic & Political Background................................... 4

Nationalisation........................................................................... 9

Recruitment ..............................................................................13

Mobility.......................................................................................19

Salaries & Cost of Living........................................................... 25

2012 Forecast...........................................................................32

Appendix Useful Information..................................................37
Contents
3
Economic & Political Background
4
Gulf countries are experiencing high economic growth compared to the rest
of the world, thanks to high oil prices and government spending
Economic Growth
2008-2012
0
20
40
60
80
100
120
2009 2010 2011 2012
Crude Oil Price
USD per Barrel
Source: Economist Intelligence Unit Source: Dow J ones & Company
2008 2009 2010 2011 2012
Forecast
5.2%
0.0%
4.2%
6.5%
4.7%
1.4%
-2.3%
4.1%
2.7%
2.2%
GCC Economic Growth
World Economic Growth
5
Gulf Economic Overview
2011
Qatar
Oman
Saudi Arabia
Bahrain
UAE
Size of Economy ($bn)
588
67
163
358
26
GDP Growth
Kuwait
179
7.0%
4.7%
4.4%
3.3%
2.2%
17.6%
Source: Economist Intelligence Unit, GulfTalent.com Interviews
Key Factors Affecting Growth
High oil price, Huge government spending programme
Government spending, some limited unrest
High oil price, Government spending, US troops
withdrawal from Iraq
High oil price, Tourism boost following Arab spring, Dubai
debt restructuring, Financial sector weakness
Domestic unrest
Completion of gas projects, Government spending on
infrastructure, 2022 World Cup preparation
During 2011, Qatar and Saudi Arabia led economic growth in the Gulf, while
Bahrain saw the regions lowest growth
6
2011 was a year of political turmoil in the Arab world
UAE
Qatar
Bahrain
Saudi Arabia
Syria
Egypt Libya

Tunisia
Yemen
Oman
Iraq
Kuwait
J ordan
Lebanon
Revolution / Overthrow of Government
Public Demonstrations
On-going armed conflict
Arab World Key Popular Movements
2011
7
GCC governments have undertaken massive wealth distribution measures
among their citizens
Source: News reports
Pay Rise for Nationals in Public Sector
2011
Qatar
Bahrain
UAE
Oman
Saudi Arabia
Kuwait
50-100
Omani Rial per month
60-120%
35-100%
up to 37.5%
25%
15%
Other Government Measures 2011
Saudi Arabia
$130bn subsidy programme
SAR 2,000 per month unemployment benefit
Minimum wage raised to SAR 3,000
Large scale housing programme
Oman
- 50,000 new jobs in public sector
- Minimum wage increased to OMR 200
- OMR 150 per month unemployment benefit
Bahrain
- One-off grant of BHD 1,000 per family
- Minimum wage increased to BHD 402
UAE
- $2.7bn fund to provide loan assistance for low
income citizens
8
Kuwait
- One-off grant of KD 1,000 per citizen
Nationalisation
9
Job creation for citizens through nationalisation of expatriate jobs continues
to be a top priority for most GCC governments
Increase in Nationalisation
% of companies reporting an
increase in their nationalisation rate
during 2011
Oman
Saudi Arabia
Kuwait
Bahrain
UAE
10%
20%
5%
7%
1%
Qatar
14% 82%
78%
54%
38%
28%
17%
Average Nationalisation Rate
Nationals employed in private
sector as % of total private
sector employment (2011)
Source: GulfTalent.com Survey of HR Managers, GCC Labour Ministries
Pressure on Employers
% of employers reporting
nationalisation as a key human
resource challenge
59%
17%
27%
17%
15%
36%
Overview of Nationalisation in Private Sector
10
GCC governments have historically used a range of measures to increase
employment of nationals in the private sector
Targets & Limits Support & Facilitation Incentives & Enforcement
Targets by sector (e.g. Banks, Oil
and Gas, etc.)

Targets by job functions (e.g. HR)
Employment fund (subsidising
wages of newly employed nationals)

Free training for nationals

J ob centers putting unemployed
in touch with employers
Withholding visas for expat hires

Tax on employers for each
expatriate employee

Public praise / reprimand
GCC Nationalisation Common Government Strategies
11
Source: Press reports, HR interviews
More innovative approaches are being tried in some countries, introducing
elements of choice, competition and commercial incentive
Companies within each sector are ranked by their
Saudization rate and grouped into 3 categories.
Companies in lowest ranks (red zone ) would face
difficulties in applying for new visas or even
renewing existing visas.
Companies in highest ranks (green zone) would be
able to hire expats from companies in the red zone
without acquiring no objection certificates (NOC).
Zone boundaries vary by industry, and are determined
based on the average of each peer group.
Companies are placed into one of 3 categories -
according to their Emiratisation level, diversity of
nationalities and compliance with proposed minimum
wage levels.
Companies in lower categories pay significantly
higher government fees for their visa requirements.
Saudisation
(Nitaqat introduced J une 2011)
Emiratisation
(Introduced December 2010)
12
Recent Nationalisation Initiatives
Recruitment
13
Saudi Arabia leads job creation in the Gulf, while Bahrain lags the group
with almost no expansion reported
Observations
Employment by Country
Net % of firms which increased headcount
UAE
Qatar
Kuwait
Bahrain
Saudi Arabia
Oman
Almost all Gulf countries had higher rates of job
creation compared to 2010.

Saudi Arabia had the highest rate of job creation
thanks to its strong economic growth and high
government spending.

Bahrain had almost no job creation in 2011
following severe political tensions in the country.

UAE had a significant rise in job creation, but it was
still much lower than most Gulf countries.

62%
56%
51%
51%
37%
8%
Source: GulfTalent.com Survey of HR Managers
2010
57%
25%
45%
22%
23%
2011
55%
14
Dubais share of regional recruitment activity has started to increase after
two years of slowdown due to a combination of jobs growth and staff
turnover
* Based on 68,000 vacancies advertised by employers and recruitment agencies on GulfTalent.com website over the specified period
Note: Internet penetration and prevalence of online recruitment varies across the countries

Source: GulfTalent.com

Recruitment Volume by Location
% of vacancies advertised on GulfTalent.com *
31%
22%
20%
16%
4%
4%
3%
2010
37%
18%
18%
17%
4%
3%
3%
2011
31%
21%
20%
14%
6%
4%
4%
2009
48%
13%
14%
8%
9%
6%
2%
2008
Oman
UAE
(excluding Dubai)
Dubai
Saudi Arabia
Qatar
Kuwait
Bahrain
15
Oil & gas, healthcare and retail sectors are enjoying the largest headcount
expansion, while banking and construction fare the worst
Observations Employment by Sector
Net % of firms which increased headcount in 2011
Oil & Gas had the highest rate of employment due to
expansion plans following two years of high oil price.

Healthcare also had high employment for a second year
mainly due to continued government investment.

Retail continued to enjoy high growth on the back of higher
consumer spending and net disposable income.

Banking had one of the lowest growth rates, with some
banks announcing fresh rounds of redundancies, following
increased worries about the Euro crisis.

Construction continued to have a low employment growth
rate due to completion of old projects and lack of new ones.
Healthcare
Telecoms/IT
Engineering
Transport & Logistics
Retail
Construction
Oil & Gas
Real Estate
Travel & Hospitality
Banking
63%
61%
60%
50%
46%
43%
41%
33%
28%
27%
Source: GulfTalent.com Survey of HR Managers
16
With Western countries facing high unemployment and low pay rises, Gulf
employers are finding hiring Western nationals easier than Asian candidates
Unemployment Rate in Western Countries
2008-2012
Private Sector Pay Increase Global Comparison
% 2011
3%
4%
5%
6%
7%
8%
9%
10%
11%
2008 2009 2010 2011
Australia
Canada
UK
France
12.6%
6.7%
5.5%
4.4%
3.1%
2.7%
2.7%
Australia
Canada
Philippines
India
GCC
UK
US
Source: Economist Intelligence Unit Source: Aon Hewitt, Hay Group, GulfTalent.com
17
The popular uprisings across the wider Middle East have had a mixed
impact on attraction and retention of talent in the Gulf
Employment
of Nationals
Expatriate
Employment
Key Trends
Nationalisation targets: Government pressure on private sector to hire more
nationals has intensified.

Competition for nationals: Pay hikes awarded by governments to public
sector employees, which were partly prompted by the Arab Spring, has made it
harder for the private sector to attract nationals.
Availability of Arab expats: More Arab expatriates are available from
countries which experienced political turmoil.

Visa restrictions: Some Gulf governments have made it more difficult to apply
for employment visas for expats from troubled countries.

Western expats: Some employers are finding it difficult to attract Western
candidates, as they perceive the region to be unsafe following the press
coverage of the Arab spring.
18
Impact of Arab Spring on Gulf Employment
Mobility
19
The UAE and Qatar remain prime destinations for expatriates, with Saudi
Arabia in third place
Observations Attraction of Expatriates
% of GCC-based expats outside the country who wish to
relocate into it
0%
10%
20%
30%
40%
50%
60%
70%
2008 2009 2010 2011
Saudi Arabia
Qatar
Bahrain
UAE
Kuwait
Oman
Source: GulfTalent.com Surveys
UAE has strengthened its position as the most
popular destination among Gulf-based expatriates.

Qatar, which was rapidly closing the attraction gap
with the UAE, remains in second place and has lost
some momentum, as sentiments about the UAE
economy becomes more positive.

Saudi Arabia remains in third place, with its
attractiveness stable, following a sharp rise in
popularity at the onset of the crisis.

Bahrain dropped from fourth place to the bottom,
becoming the Gulfs least attractive destination for
expatriates, following political tensions in the country.
20
Ranking of Gulf Cities By Attractiveness to Expatriates
% of GCC-based expats outside the city who wish to relocate into it
Source: GulfTalent.com Survey
Overall
Abu Dhabi
Dubai
Doha
J eddah
Kuwait
Riyadh
Muscat
Sharjah
Manama
Dammam
Madina
Makkah
Western
Expats
Asian
Expats
Arab
Expats
37%
22%
20%
7%
4%
3%
3%
3%
3%
2%
2%
2%
26%
46%
21%
3%
1%
2%
8%
1%
3%
0%
1%
0%
20%
35%
20%
7%
4%
3%
4%
2%
2%
2%
3%
3%
17%
38%
25%
9%
3%
3%
2%
1%
1%
1%
3%
2%
Dubai remains by far the regions most attractive city for expatriates
21
In terms of attractiveness to expatriates living within the country, the UAE
once again retains the lead position
UAE
Saudi Arabia
Kuwait
Oman
Bahrain
2011
59%
50%
51%
50%
50%
2012
Qatar
72%
Observations
UAEs already high retention rate has increased further,
due to a rebound in business confidence, declining rents
and the countrys high level of political stability.

Kuwait benefits from the long-term nature of its
expatriate population, with social and family ties formed
over the years discouraging expats from leaving the
country.

Qatars retention rate remains significantly lower than
UAE mainly because of laws preventing expatriates from
changing jobs.

Bahrains retention rate has dropped for a second year,
following political tensions and slow economic growth in
the country.
Retention of Expatriates
% of expats within the country who wish to remain there
Source: GulfTalent.com Survey
81%
64%
49%
49%
46%
45%
22
Abu Dhabi continues to serve as an employment hub for a portion of Dubai
residents, while Bahrains role as a base for working in Saudi has taken a hit
Dubai-residents working in Abu Dhabi
As % of all working professionals living in
Dubai
1.1% 1.1%
3.4%
5.4% 5.4%
1.0%
0.9%
1.1%
2.2%
1.3%
Source: GulfTalent.com Surveys
Bahrain-residents working in Saudi Arabia
As % of all working professionals living in
Bahrain
23
2008 2009 2010 2011 2007 2008 2009 2010 2011 2007
Governments across the Gulf are continuing to encourage labour mobility
within their countries, through easing NOC requirements *
Recent Developments Labour Mobility Country
Qatar
Saudi Arabia
Kuwait
UAE
Bahrain
Oman
NOC not required if previous employer below
required nationalisation targets (J une 2011)
New sponsorship system plans to remove NOC
requirement altogether, but not implemented yet
NOC not required after completing 2 years
(J an. 2011). Already removed fully for free zones.
* No Objection Certificate issued to expatriate employees by their employer, giving consent to the expatriate being hired by another firm
NOC requirement abolished in 2009
NOC requirement abolished in 2007
Most strict in the Gulf. NOC fully enforced. No
indication of an imminent easing.
Source: Press reports, HR interviews
Guide to chart
Full labour mobility
(NOC not required)
No labour mobility
(NOC fully enforced)
24
Domestic Labour Mobility
Salaries & Cost of Living
25
Average private sector salary increase in the Gulf has remained stable, but
much lower than pre-recession levels.
GCC Average Salary Increase
%, 2007- 2012
9.0%
11.4%
6.2% 6.1%
5.5% 5.6%
2008 2009 2010 2011 2007 2012
Forecast
Source: GulfTalent.com Surveys
26
6.5%
6.0%
5.6%
5.1%
4.9%
4.5%
During 2011, Oman enjoyed the highest average increase in pay, followed by
Saudi Arabia and Qatar
Observations
Oman had the highest salary increase in the Gulf, in
part driven by widespread strikes by Omani
employees and the pay hike awarded in the public
sector.

Saudi Arabia and Qatar continued to have high
salary increases on the back of strong economic
developments.

Bahrain had the lowest salary increase due to lower
economic growth following the political unrest.

Qatar
Oman
Saudi Arabia
Bahrain
UAE
2010
6.7%
6.8%
5.7%
5.2%
4.9%
2011
Kuwait
6.4%
Source: GulfTalent.com Survey
Private Sector Salary Increase by Country
27
4.9%
4.0%
3.7%
2.5%
1.0%
0.4%
Average pay rise net of inflation, was highest in the UAE and Bahrain
Observations
Despite having the lowest salary increases in the
Gulf, Bahrain and UAE enjoyed the highest
increases in real terms due to very low inflation
rates.

Saudi Arabia and Kuwait had the lowest salary
increases in the Gulf in real terms, due to
relatively high inflation.
Qatar
Bahrain
UAE
Saudi Arabia
Kuwait
Salary Rise
4.9%
5.6%
6.5%
6.0%
5.1%
Real Salary Increase by Country *
Oman
4.5%
Inflation
0.9%
1.9%
4.0%
5.0%
4.7%
-0.4%
* Defined as nominal pay rise net of inflation rate
Source: GulfTalent.com Survey, Economist Intelligence Unit
28
HR professionals enjoyed the highest pay rise, while Administration and
Marketing had the lowest
Observations
HR had the highest salary increase for a second year,
reflecting the rising profile and growing sophistication
of the HR role, as well as leaner HR operations
supported by fewer staff following the crisis.

IT had one of the highest increases last year, due to
global shortage and on-going demand for IT
professionals.

Admin candidates continued to have one of the
lowest increases, as companies continue to automate
processes and seek staffing efficiencies.
Finance
HR
IT
Admin
Engineering
Sales
Marketing
6.4%
6.3%
5.5%
5.3%
5.3%
4.9%
4.6%
Source: GulfTalent.com Survey
Salary Increase by Job Category
%, 2011
29
Among sectors, Healthcare and Retail offered the highest pay rises, while
Real Estate had the lowest
Healthcare had the highest salary increase, due to
increased investments by GCC governments, specifically
Saudi Arabia.

Retail sector continued to have high salary increase in
line with strong growth in the sector, generated by high
consumer spending.

Banking sector continued to suffer for a third year,
following a slow rate of recovery and fresh rounds of
redundancies on the back of the European debt crisis.



Source: GulfTalent.com Survey
Healthcare
Oil & Gas
Retail & FMCG
Telecoms & IT
Engineering
Construction
Travel & Hospitality
Transport & Logistics
Education
Banking
Real Estate
6.4%
6.2%
5.7%
5.7%
5.6%
5.4%
5.1%
5.0%
4.6%
4.5%
4.3%
Observations Salary Increase by Industry
%, 2011
30
Rent for Two-bedroom Apartment
US$ per month, 2012*
Inflation
%
Abu Dhabi
Dubai
Doha
Sharjah
Muscat
Manama
Kuwait
J ubail
Riyadh
J eddah
Dammam
Khobar
* Average figure. Wide variations based on location and quality
Source: GulfTalent.com Survey
Source: Economist Intelligence Unit
Qatar
Bahrain
UAE
Saudi Arabia
Kuwait
2011
Oman
2010
3.2%
4.0%
-2.4%
0.9%
2.0%
5.4% 5.0%
4.7%
4.0%
1.9%
0.9%
-0.4%
1,930
1,650
1,590
1,000
960
910
840
710
670
670
670
550
Cost of living has continued to rise in Saudi Arabia, Kuwait and Oman. In
absolute terms, however, it remains low compared to UAE and Qatar
31
2012 Forecast
32
Observations 2011 2012
Expected Average Pay Rise
%, 2012 Forecast
Source: GulfTalent.com Survey of HR Managers
Gulf salary rises during 2012 are expected to be broadly in line with 2011
Gulf employers generally expect similar salary
increases in 2012 compared to the previous year

Qatar and Saudi Arabia are expected to have the
highest increase in the Gulf and slightly higher than
their 2011 levels, as companies expand to capitalise
on the two countries strong economic growth

Bahrain is once again expected to have the regions
lowest salary increase in 2012 due to a stagnant
economy following domestic unrest in 2011.

Oman
Saudi Arabia
Kuwait
Bahrain
UAE
Qatar
5.1%
6.5%
5.6%
4.9%
4.5%
6.0%
6.4%
6.2%
5.6%
5.1%
4.9%
4.5%
33
Job creation is expected to be moderately higher in 2012, with Saudi Arabia
continuing to lead
All Gulf economies are expected to have higher rates
of job creation in 2012 compared to the previous
year.

Saudi Arabia is expected to continue to have the
highest rate of job creation in the Gulf, thanks to high
economic growth and government spending.

Bahrain is expected to rebound partially from a
stagnant job market in 2011, but will continue to have
the regions lowest rate of job creation.
Oman
Kuwait
Bahrain
UAE
Qatar
77%
73%
68%
65%
51%
42%
Source: GulfTalent.com Survey of HR Managers
Employment Growth by Country
Net % of firms increasing headcounts
Observations 2011 2012
56%
51%
51%
37%
8%
62% Saudi Arabia
34
Oil & gas, retail and healthcare will continue to dominate jobs growth, while
banking and construction continue to have the lowest growth rates
Observations
Oil & Gas is expected to have the highest expansion
in 2012 due to new projects in the sector.

Retail is expected to continue growing at a high rate
due to higher net disposable income and consumer
spending.

Banking is expected to have the lowest rate of job
creation in 2012, due to continuing credit concerns
and the Euro-zone financial crisis
Healthcare
2011 2012
63%
Oil & Gas
60%
Retail
61%
Telecoms & IT
50%
Engineering
41%
Construction
43%
Travel & Hospitality
46%
Transport & Logistics
33%
Banking
27%
Real Estate
28%
73%
72%
65%
63%
62%
62%
58%
57%
48%
46%
Source: GulfTalent.com Survey of HR Managers
Employment Growth by Sector
Net % of firms increasing headcounts
35
Source: Economist Intelligent Unit, GulfTalent.com Interviews
A number of external uncertainties can impact the Gulf economy and labour
market during 2012
Political & Economic Uncertainties
Political Factors
Arab spring: Significant uncertainty remains over the
outcome of the conflict in Syria, the kind of
governments which are likely to emerge in place of
those that have fallen, and the extent to which
developments in the wider Arab world will impact Gulf
countries.

Iran tensions: A possible military conflict with Iran
could have unpredictable consequences for the entire
Middle East region including Gulf countries.
Economic Factors
European debt crisis: Continuing bad news in
Europe, including the possibility of a sovereign default,
could lead to another global recession impacting Gulf
countries, particularly the UAE which is more exposed
to global trade and tourism.

US Dollar: Given the Gulf countries peg to the US
Dollar, any significant fluctuations in the value of the US
Dollar against other currencies could impact Gulf
employers ability to attract and retain expatriates
particularly from major source countries such as India.
36
Appendix Useful Information
37
Useful Information
Forecast
Source: Economist Intelligence Unit, GulfTalent.com Surveys
Country 2010 2011 2012 F
Bahrain 4.9% 4.5% 4.5%
Kuwait 5.7% 5.1% 4.9%
Oman 6.4% 6.5% 5.6%
Qatar 6.8% 5.6% 6.4%
Saudi Arabia 6.7% 6.0% 6.2%
UAE 5.2% 4.9% 5.1%
Salary Rise by Country
% Rise in Base Salary
Country 2010 2011 2012 F
Bahrain 2.0% -0.4% 2.2%
Kuwait 4.0% 4.7% 4.4%
Oman 3.2% 4.0% 3.7%
Qatar -2.4% 1.9% 2.1%
Saudi Arabia 5.4% 5.0% 4.3%
UAE 0.9% 0.9% 2.1%
Inflation
Country 2010 2011 2012 F
Bahrain 4.5% 2.2% 3.1%
Kuwait 3.1% 4.4% 5.4%
Oman 5.0% 4.7% 4.5%
Qatar 14.0% 17.6% 7.6%
Saudi Arabia 4.1% 7.0% 4.8%
UAE 1.4% 3.3% 3.5%
Economic Growth
% Real GDP Change
Country 2012
Bahrain 1.3
Kuwait 3.9
Oman 3.4
Qatar 1.8
Saudi Arabia 28.9
UAE 7.5
Population (millions)
38
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