Global Watch brings you the latest updates from around the globe on management, actuarial human resources issues.
These updates are reported by our world-wide network of local experts in more than 180 countries.
Background and Details
- To secure a US12 billion loan from the International Monetary Fund (IMF), the Central Bank of Egypt (CBE) floated the Egyptian Pound and increased lending rates.
- It happened during November 2016 and led to an immediate steep devaluation of the Egyptian pound.
- By the start of 2017, the Egyptian Pound had already fallen approximately 110% against the US Dollar.
- This resulted in inflationary pressures that led to major price increases. As of April 2017, food and beverages costs increased by 43.6%.
- Annualized core inflation rose 32.06% as of April 2017, the highest inflation rate since June 1986.
- These events have profound negative influence on the quality of life and living conditions of many Egyptians.
- Making ends meet has never been easy for the average Egyptian employee, but now it became a struggle.
What Global Employers Should Expect
As expected, local employees turn to their Global Employer for additional compensation, to cover for their loss of purchasing power.
- Surveys reveal that the most common reaction of Global Employers, is an increase in the earlier planed salary increase budgets.
- A less common reaction by Global Employers, are lump sum payments.
How Should Global Employers React
Global Employers in the Middle East , should closely monitor developments and employees’ reaction to such situations.
- Remember that most Global employers compensate local employees on the Cost of Labor basis and not on the Cost of living Basis.
- Mixing the two is not advisable as it could lead to expectations gap between employers and employees.
- Supply and demand of talent set the market pay levels. Your organization’s pay levels should always be based on market pay levels for each position within the organization.
- Your salary increases and overall compensation policy should therefore reflect only that.
- Use market data to plan your immediate and future reactions to the unfolding situation, and get proper advice from your local consultants.
How KrollConsultants Can Help
Our Local Presence Across the Middle East
- KrollConsultants operates a global multidisciplinary network of local consultants, salary survey data providers and information sources, in more than 180 countries.
- Our clients are relying on our abilities and track-record in the Middle East region, as providers of actuarial, human capital, HR and management consulting services. And as providers of salary survey for Egypt and the entire region.
- Our local experts and information providers around the Middle East come from diverse disciplines, are familiar with local culture, practices and trends and are well connected.
- You will get proper practical guidance and gain valuable insights for your local operations in the region.
Need Our Help in Egypt? Please Get in Touch
- Whether you are an executive, a professional or a consultant with a business need. Or have a question regarding our services and products. Please use this form to contact us.
- Alternatively, you can phone us at: +972 544 736 210. We shall be happy to provide you with all the information you need.
- See all other contact options here.
We look forward to speaking with you.
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