Middle East IT industry sees pay fall by up to 40%

HR managers predict salaries will not return to previous levels until 2010.  

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By  Joanna Hartley Published  May 27, 2009

Those working in the technology sector in the Middle East have seen their salaries drop by between 20 and 40 percent during the past year, it was reported on Wednesday.

Lower starting salaries, pay freezes and cut backs in perks and bonuses have had to be brought in as a result of the global crisis, according to HR managers and recruitment specialists.

A senior consultant from Dubai-based Lobo Management Services speaking to UAE daily Emirates Business reported that salaries and perks had declined up to 40 percent.

At Hewlett Packard salaries had for new recruits had fallen by 20 percent - a situation that was expected to last until 2010, added Peter Spaans, human resources manager for the ME at the company in an interview with the same newspaper.

"In our experience salaries for new hires have gone down by approximately 20 percent for the same role between last year and recent months," Spaans said.

"We do not foresee a change this year and it will most likely be 2010 before rates improve. The economic downturn and subsequent correction of rental prices have caused a decrease in remuneration for job seekers. It is better to have a job with lower pay than no job,” he added.

Paula Leech, HR Director of Microsoft Gulf said her company had implemented pay freezes.

"The overall reaction to the downturn has been to stop giving pay increases," she said.

"A return to last year's remuneration levels will be determined by how quickly the external environment recovers,” she added.

The industry has traditionally offered good renumeration and benefits compared to other sectors, but pay increases were closely linked to industry gains and recruitment demand, Leech pointed out.

At present fewer people are being recruited into the industry, as another direct result of the global crisis, said J Trivikram, HR Manager at Acer Computer, Middle East.

"If there were 10 people being recruited by an IT company last year, now that has reduced. This scenario has made the whole market look like less attractive in terms of remuneration. On the regional level, salaries are still stable but there may not be growth,” he said.

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