Why Paying A Good Salary In Qatar Is Not Always Enough

Qatar Salary

According to The HSBC Expat Explorer Report for 2014, Qatar ranks at 13th out of 34 countries as the best expat destination to relocate to. Switzerland ranked as the number 1 destination to relocate to with Bahrain coming in at a surprising 5th place.

The survey was conducted between April and May 2014, with over 9,000 expats from over 100 countries taking part. The survey focuses on the experiences of expats in their new country of residence and uses 4 main key elements in the report.

Expat economics evaluates expat earnings, savings potential and the impact on global financial climate in relation to these factors.

Expat experience analyses the expats lifestyle with specific focus on how easy it is to settle in to a new country of residence and how well the new expat integrates into the new community and also the overall quality of life experienced in the new country of residence.

Raising Children abroad indicates which country is considered the best to raise children in.

Expat Expenses unveils the most cost effective countries for an expat to live in.

With all these kinds of surveys it is important to remember that everyone’s relocation experience in a new country is both different and relative. What one expat perceives as expensive may be different from another expat, so these surveys only give an indication and approximation of a “reality” on the ground and not necessarily the experience another expat would have and bear in mind this report mainly polled higher earning expats rather than those in the labour market.

Most expats polled indicated that the main reason for relocating to The Middle East was job earnings and job prospects. The biggest threat to an expats financial stability in Qatar is the increase in housing rentals. In Qatar, an average of 40% of an expats salary is going toward rental. This is compared to the global average of 19%.

Qatar ranked number 5 in Expat Economics in 2014, but subsequent to this 2014 report, property rentals have been on the increase and seem destined to continue this trend in the near future as land values have been skyrocketing in the past few months in 2015. It does seem that most single expats are quite happy to have an “all work” orientated lifestyle as opposed to a “work/play” lifestyle, but married and family expats do expect a better balance of the two. Bahrain tops the list in The Middle East for this work/play balance and it is interesting that Bahrain rates so high overall as a result.

So what makes Bahrain more appealing than Qatar as an expat destination?

Property rental increases in Bahrain are perceived as less threatening to an expats income. 19% of expats in Bahrain state that rental increases pose a threat to their financial well-being as opposed to 38% in Qatar.

In 2012 the property boom ended in Bahrain and resulted in more cost effective housing options being built.

The current property boom in Qatar is probably one of the greatest threats to expats coming to live and work in Qatar as their disposable income is eaten away by rising property rentals. This threat has a devastating knock on effect as companies in Qatar struggle to recruit high level talent and have to resort to paying higher salaries. This results in an increase in the costs of products and services and an overall rise in inflation which means Qatar becomes less attractive as a destination for mid to low-income earners. Without low-income earners growth itself will halt.

According to The HSBC Expat Explorer Report 2014, Qatar rates higher than Bahrain for Expat Economics with Qatar coming in at No 5 as opposed to Bahrain’s No 11, so clearly money is not everything when it comes to the happiness of an expat. Qatar is clearly rating higher as an economic destination for expats, but overall still lags far behind Bahrain.

Where Qatar seems to really fail according to the survey, is in Expat Experience where Qatar comes in at number 28 as opposed to Bahrain’s number 2. Expat experience is made up of the following criteria; setting up, integration and quality of life. This criteria is where Qatar companies need to improve their services toward employees who arrive to come and work in Qatar. Relocations companies are vital in this process as their core duty is to settle an expat into a country and integrate them into their relative communities. The lack of sufficient relocation services provided to expats in Qatar is a clear reflection of why the retention rate and overall rating of Qatar as an expat destination is trailing far behind other countries globally and within this region. Providing even the most basic of relocations assistance to employees, will improve loyalty and make Qatar a more sought after destination for expats to come work in.

There are undoubtedly other factors that add to a good relocation destination and there are also many companies in Qatar who have addressed these issues and the Government as a whole seems to be aligned with understanding the need to make Qatar a more attractive destination for expats but the HSBC Expat Explorer Report 2014 clearly shows that a lot more needs to be done if Qatar is going to compete with other players, even players like Bahrain, in attracting the best talent to this region and money is not enough.

References

HSBC. Expat Explorer Report 2014. Jersey: HSBC Expat, 2014.

By Frederick Goss – Relocation Specialist – Coreo

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