Good news for in-demand workers, but bad news for businesses.
A new report says salaries for in-demand workers could add $39.5 billion to countries' total national payroll by 2030.
Salaries for highly skilled workers could boom as talent shortages take hold across the Middle East, according to The Salary Surge, a new study by Korn Ferry.
In the UAE, while overall wage increases are just keeping pace with inflation, salaries for in-demand workers could add as much as $5.9 billion to the total national payroll by 2030, a 9 percent increase, the report said.
It added that businesses in Saudi Arabia could see a wage surge of more than 17 percent, adding a potential $33.6 billion to national payrolls in the same period.
Globally, if left unchecked, the salary surge could add more than $2.5 trillion to annual payrolls by 2030 in 20 leading economic markets analysed, the direct the result of a shortage of an estimated 85 million highly skilled workers required for companies to succeed in the new digital economy.
The study revealed the significant impact the salary surge could have on Saudi Arabia and the UAE, where the technology, media and telecom sector could be hardest hit, with a potential wage premium of $2.4 billion and $1.1 billion respectively by 2030.
It added that Saudi Arabia ranks number eight out of 20 economies in individual wage premiums for highly skilled workers, with potential individual salaries rising by $10,700 per worker by 2030.
“This is a challenge facing both corporate and government leaders planning for economic success in the new economy. In the public sector, the longer-term solution starts in the education sector and how we are preparing our students with new skills more adaptable to the future of work,” said Harish Bhatia, regional director, Korn Ferry Products MENA.
“In the private sector, business leaders need to reimagine all aspects of talent management, employee engagement and reward schemes to better position them to retain top talent at lower wage premiums to protect profitability and business models.”
US consulting firm Korn Ferry’s Salary Surge study estimates the impact of the global talent shortage on payrolls in 20 major global economies at three milestones - 2020, 2025 and 2030, and across three sectors - financial and business services; technology, media and telecommunications and manufacturing.
It measures how much more organizations could be forced to pay workers, above normal inflation increases.