A recent study by Target HR Services showed that the largest companies operating in Egypt intend to apply a salary raise of an average of 15% with the devaluation waves of the Egyptian pound, which started last year and persists to this day, with a global record wave of inflation.
The study by Mercer, also confirmed that 25% of companies participating in their research will raise their salaries by 12%, while 75% of companies will apply for a 20% raise.
47% of companies will implement the raise starting this January, 24% of them will start implementing the raise in April, and the rest of the companies will implement it over the course of the year.
Dollars instead of Egyptian Pounds.
The survey showed that 3% of the largest companies in Egypt, which pay their salaries in Egyptian pounds, intend to replace it with the US dollar, while 97% of the companies will keep using the local currency.
95% of companies participating in Mercer’s survey indicated that they paid their salaries in 2022 in Egyptian pounds, while 3% paid in dollars or foreign currency, and 2% paid the equivalent of dollars in Egyptian pounds.
25% of companies indicated that the average rate of rise in salaries in 2023 is 10%, while 75% of them believed that the best rate is 14%.
37% of the companies preferred to raise their salaries in January, while 25% of them thought it would be better to raise salaries in April, and 15% would raise their salaries in March.
Responding to currency fluctuations
48% of the companies implemented additional measures in favor of their employees to face the effects of the exchange rate. 37% of these companies approved an exceptional increase in salaries. 34% of them increased salaries by a lump sum, 17% of them increased their allowances, 13% of them added a temporary additional amount, and 19% of them took other measures.
23% of the companies took actions to increase their workers’ entitlements, but have not implemented them yet, while 29% stated that they would take no action.
73% of the companies only added one benefit to their employees, while 17% of them added two benefits, and 10% of them added 3 or more benefits.
91% of the companies had only one exceptional salary increase, but 9% of them applied multiple increases during 2022.
It is worth noting that annual Inflation in Egypt escalated by 21.3% in December, compared to 18.7% in November, according to data from the Central Agency for Public Mobilization and Statistics.
Inflation Reasons:
Inflation accelerated at its fastest pace in five years, accompanied by rounds of the Egyptian pound plummeting in value against the dollar.
The Egyptian pound received a heavy blow by losing 14.15% of its value in one day, declining to 32.15 pounds against the US dollar at the end of official transactions after starting at 27.6 pounds.
The Egyptian pound dropped against the dollar to an all-time low in the transactions of Egyptian banks earlier, rendering the dollar at 32.15 pounds in a number of local banks.
This happened a day after the International Monetary Fund (IMF) announced the details of Egypt’s economic reform program, under which Egypt obtained the international institution’s approval to borrow $3 billion as part of the Fund’s extended facility.
