Booming Indian economy leads to Gulf pay hike

DUBAI: The salary levels in the Gulf countries have seen a steep rise, aided by the continued economic growth and rising pay-packets in India, traditionally the main supplier of expatriate workforce to the region, said a new survey.

The study further revealed that as the supply of skilled staff from traditional markets such as India and Egypt diminished, many employers were looking to new sources such as China, Eastern Europe and Latin America.

At the same time, staff shortages were forcing companies to outsource more of their operations or to switch to other processes and technologies that are less manpower-intensive.

With government controls no longer protecting employers against staff attrition, many are forced to raise pay levels to retain their employees, says a survey by GulfTalent.com, the Middle East's leading online recruitment firm.

"The gap between Indian and Gulf packages is fast closing, making it tremendously difficult for Gulf-based employers to attracts professionals from India, historically the main source of affordable talent," said the study -- "Gulf Compensation Trends in 2007".

"Continued economic growth and intense competition for talent... (are the) key drivers of pay rises, along with spiralling living costs in parts of the region," it said.

The salary rise can also be attributed to the easing of laws in some GCC states regarding expatriates changing employment.