High expectations for an increase in wages in 2023. What is the percentage?

A study by Target Recruitment & HR Solutions expected that some sectors will raise their employees' salaries in the New Year 2023, with the increase in global inflationary pressures, which led to an increase in the cost of living in Egypt and the region to varying degrees.

• Inflation and Increasing salaries

Egypt's annual inflation in September rose by 15.3%, almost double the figure in September last year at 8%. This means increasing the burden of private sector workers, as they anticipate annual increases after many shocks starting from the coronavirus pandemic through the repercussions of the Russian-Ukrainian war on the global economy to keep raising interest ratios in global central banks. The International Monetary Fund (IMF) expects inflation in Egypt to rise by 12% in 2023, with the unemployment level stabilizing at 7.3%, the figure recorded in 2021 and 2022.

Mohamed El- Derwy, Managing Director of Target Recruitment & HR Solutions, said that the study conducted by his company, through its work with international and local companies, suggested that the technology sector and related companies would raise salary levels during the new year at rates that keep pace with inflation levels, in conjunction with the increase in demand for Its services and products such as the software developer job, which is one of the most in-demand jobs in the world, with expectations of growth in demand for it between 30% and 40% in the coming years.

El- Derwy added that manufacturing companies would likely approve a small increase in their salaries of only 7% so that operating costs and industry increased by global variables are not affected, as well as the negative impact of rising prices on demand and sales levels.

• Between developing and developed economies

El- Derwy added that the percentages of required increases in nominal wages in developing economies amount to 0.6% for every 1% of inflation. At the same time, they are similar in advanced economies, with rates of increase in inflation, according to a study prepared by the International Monetary Fund. The worker receives the nominal wage regardless of purchasing power or inflation levels. Target revealed in a previous study this year that 40% of participating institutions provided their employees with a variable living allowance cost for a limited time (between 3 and 6 months), at a rate ranging from 10% to 18% of their salaries, depending on the payment at the end of the period and market variables.

Since 2006, Target Recruitment & HR Solutions has emerged as a leading provider of human resources services in the Egyptian market, offering four core services: recruitment and talent management, human resource consulting, pay and benefits systems management, and human resource project management and governance.

Target Recruitment & HR Solutions, with significant experience, also supports companies in focusing on their core business by providing a professional team to handle recruitment, outsourcing services, issuance of employment contracts, personnel management, social and medical insurance, policy development, and monthly payroll management for over 1000 clients from both foreign and Egyptian companies throughout Egypt.