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Dubai: The UAE ranks second worldwide in managerial spending capacity, according to the 2008 World Pay Report by Hay Group.
While Qatar, a new entry, tops the report in terms of disposable income, the oil-driven Gulf economies are among the top in the table. This is despite a strong increase in the cost of living, which has been more than matched by the increase in wages. Managers in Qatar and the UAE have almost two-and-a-half times the spending power of US managers.
As the Gulf economies diversify out of the traditional oil and gas sectors, the demand for top talent continues to drive salaries higher.
"We are not witnessing economies in the Gulf region of the Middle East going through a credit crunch. Although their disposable income has fallen over the last year, managers in most of the Gulf countries continue to be at the top of the table," said Vijay Gandhi of the Hay Group Middle East.
"However, even at these salary levels it's becoming difficult for employers to recruit the 'right' talent and retain existing top managers, who keep getting lucrative job offers within the region," he said.
On average, over 80 per cent of the workforce in the Gulf region are expatriates and as economies continue to expand, employers are encountering a shortage of supply.
Salary increase
According to the World Pay Report, senior managers continue to get a salary increase of between 15 to 20 per cent, which is very aggressive compared to most other countries.
The demand for management talent far outstrips supply in these markets, meaning that companies must compete with developed economies for the talent they need. At the same time, the cost of living is determined more by local factors, keeping the relative value of management salaries high.
In Asia, senior managers in Hong Kong continue to dominate in disposable incomes with spending power almost double that of their US counterparts. This international trade and fin-ance centre traditionally enjoys the highest pay - about a quarter more than other Asian countries - coupled with low taxes.
Thailand, China, Singapore and Malaysia also fall into the top half of the rankings, while the more developed economies of South Korea and Japan line up with their counterparts from Western Europe and North America.
"The shortage of management talent in China's booming economy means companies need to pay over the odds to find and keep management talent, in comparison with more developed markets such as Singapore," said Charlotte Park of Hay Group Asia.
By contrast, disposable income in India (ranked 38th in the table) is low relative to other emerging economies, making India a value for money, high-quality talent destination for employers.
In line with other developed economies, the US is ranked firmly towards the bottom of the table at 41 while managers in Western European economies tend to have spending power towards the middle to lower range. The UK ranks near the bottom of the table, reflecting relatively high tax and cost of living coupled with a slower rate of growth in the economy than developing economies.
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