PROCAPITA Annual Report 2023/2024: An in-depth analysis of labour market trends and practices in the GCC countries

Today, PROCAPITA, a leading HR consultancy firm in the region, has officially released its second annual report for the Gulf Cooperation Council countries (GCC) for the year 2023/2024. The report conducts a thorough analysis of the labour market in the region, shedding light on the latest developments and trends in the field of human resources. It covers essential aspects, including economic highlights, recruitment & manpower planning, technology, talent management, compensation and benefits, and board remunerations.

To provide valuable insights, PROCAPITA executed a meticulously designed survey, involving over 1,200 organizations from various sectors in the GCC. Their active participation significantly contributed to enriching the depth and accuracy of the findings presented in the report.

Commenting on the report, Mohammed Abu Al-Rob, CEO of PROCAPITA and founder of ZENITHR, stressed the importance of this annual report, which has become an invaluable resource for companies navigating the evolving landscape of the labour market in the GCC countries, as it provides a comprehensive understanding of the economic developments and the resulting transformations concerning human resources and employment patterns in the GCC countries. It also provides a comprehensive analysis of the impact of artificial intelligence technologies on the operational processes in the organizations, as well as the compensation provided to members of the boards of directors of companies that offer their shares for public trading in the GCC countries.

Abu Al-Rob also highlighted the effective role of PROCAPITA's strategic partners, ZENITHR for HR Intelligence Solutions and Thomas International, which specializes in conducting behavioural and professional assessments of employees. Their expertise has expanded and deepened the understanding of various precise aspects related to talent dynamics in organisations and industries across the region. Furthermore, this collaboration embodies a steadfast commitment to providing the best value to all partners. He noted that the increase in the number of participants reflects a deep confidence in the team's efforts to understand the dynamic landscape of human resources in the Gulf Cooperation Council region.

Key findings of the report:

Recruitment and manpower planning

Employment growth rate

Employee growth rate remained positive in the GCC, with 66.7 per cent of the participating organizations citing increases in 2023. The highest growth rate was recorded in KSA, which could be attributed to various labour reforms, including private sector investment and entrepreneurship initiatives, boosting the Saudi Arabia talent market forward. On the other hand, organizations in Qatar cited a low employee growth rate in 2023 potentially due to the completion of the 2022 FIFA World Cup, which reduced the demand for talent.

70.1 per cent of participating organisations in the GCC expect the employee growth rate to increase in 2024. Organisations in Saudi Arabia have the highest expectation of growth potentially due to investment in various mega projects to boost tourism and the hiring for mega-projects such as NEOM. The outlook for the GCC is promising, as organizations anticipate favourable advancements that will lead to economic growth and progress.

Causes of employees quitting:

In the GCC, 64.6 per cent of the organisations identified the prospect of new job opportunities as the main reason to quit their positions. Participating organizations in UAE, are the highest to cite such reason, which could be related to the “Green Visa” initiative.

Moreover, compensation and benefits stand as the second reason at 43 per cent for talent quitting their jobs, compared to last year when compensation was the main reason at 71.5 per cent according to PROCAPITA's 2022 annual report*. This shift indicates a change in the talent hiring trends, suggesting new attractive career opportunities for skilled professionals.

Recruitment challenges

43.3 per cent of participating organisations perceive competitive compensation offered by the neighbouring markets to be a challenge and this leads to ‘talent drain. Moreover, 39 per cent find the lack of skilled professionals to be another challenge. Bahrain faces a challenge resulting from the attractive compensation and benefits offered by neighbouring countries, which hinders the recruitment process. Kuwait suffers from the challenges of laws to attract talent.

New hires success rate

In the GCC, more than 75 per cent of employees who completed their probation period were successfully hired, as reported by 56 per cent of participants with the highest being in the UAE, reflecting a high success rate in the hiring process. However, Bahrain had the lowest hiring rate as reported by the participating organisations which signifies a need to work on talent acquisition and retainment.

Turnover rate:

KSA recorded the highest turnover cited at 14.1 per cent, which might be attributed to various initiatives and mega-projects fueling economic growth and creating a vibrant market, such a dynamic environment encourages talents to move and seize better opportunities arising from the current transformation.

Technology impact of AI:

The average salary increment in the GCC countries in 2023 was 6.7 per cent compared to 2022, which recorded 5.2 per cent on average. This increase is due to several factors, including the strong performance of the labour market, which reached an unprecedented peak in the past decade, especially In KSA and UAE.