Are these 60% salary increases for Qatari bankers really a good thing?

When it comes to achieving nationalisation targets, banks in both Qatar and Dubai have always struggled to prise local candidates away from relatively cushy and well-paying public sector jobs.

Now, in response to spiralling salaries in government jobs, banks in Qatar have been handing 60% pay rises to local staff to ensure they're able to compete.

The International Bank of Qatar (IIQ) has today confirmed that it's increased compensation for local staff by 60%, following similar moves by Qatar National Bank (QNB) and Qatar International Islamic Bank (QIIB).

QIIB said it was intended to encourage Qataris to "show their creativity and to perform their jobs satisfactorily".

In response to uprisings across the Middle East, the so-called 'Arab Spring', supposedly more stable states in the GCC have been rolling out initiatives designed to keep their citizens happy.

In Abu Dhabi, expats have been ousted from senior positions to make way for a local candidates, localisation efforts have been stepped up across the Gulf, the UAE is also considering hiking up private sector salaries to compete with the public sector and Emirati graduates now earn up to 80% more than their expat counterparts.

Despite these localisation efforts, in the more sophisticated sectors of financial services expats still dominate. In the Dubai International Financial Centre, for example, just 3% of employees are Emiratis.

While increasing salaries in Qatar will undoubtedly attract more nationals to the banking sector, there's also a danger that showing such a willingness to pay for local talent could push pay up further.

In 2008, with banks chasing onerous Emiratisation targets amid a dearth of local candidates, salaries were escalating as candidates switched jobs for more money, and average tenure in a role fell to just seven months.

What's more, by increasing the cost of hiring locals, there's more of a chance that companies will start paying lip service to localisation quotas, rather than recruiting nationals based on merit.

"The private sector is being strongly encouraged to hire locals but many businesses (including banks) can't afford them and therefore most will only hire the absolute minimum that is required of them," says one Doha-based headhunter.