Companies in the GCC are granting fewer salary increases to their employees in 2017, with just 25 percent of companies in the UAE issuing pay rises to less than half of their employees, according to a recent report by advisory firm Korn Ferry Hay Group Middle East.

In Saudi Arabia, less than half of companies are giving out base salary increases, according to the report.

The decline is believed to be the result of global economic pressure between 2009 and 2014, which led to smaller cost budgets.

However, the report showed base salaries in the Gulf remain among the highest in the world, with organisations competing with the demands of a diversifying economy and a shortage of skilled workers by raising base salaries to attract and retain talent.

The Gulf is currently facing slow growth triggered partially by the uncertainty of Value Added Tax (VAT), low oil prices and inflation. The report revealed 30 percent of companies issued pay rises for a select group of employees compared to over 75 percent of companies between 2009 and 2014.

It showed bonus payments have also been in decline since 2015, with the trend expected to continue into 2018.

However, experts at Korn Ferry said the difference between average and high performers is widening as firms have higher accelerators for top performers.

“This differentiation on performance is more prevalent today than any time before in the Gulf region,” said Vijay Gandhi, regional director at Korn Ferry.