21 percent of firms surveyed expect to lower their employees’ salaries – a surprising trend given the increased demand for talent
Average salaries in the UAE are expected to increase by 4.5 percent in 2024, a survey report released by a leading recruitment agency in the Gulf said on Wednesday.
The increase in salaries is owed to the strong performance of non-oil sectors and an increase in the country’s OPEC+ oil production quota, the Cooper Fitch ‘Salary Guide UAE 2024’ report says.
“A larger proportion of UAE-based organizations grew their headcount in 2023, compared to 2022, and more than half of this year’s respondents intend to increase remunerations in 2024. This is positive news for job seekers in the emirates as greater demand for talent typically results in higher salaries,” Founder and CEO of Cooper Fitch Trefor Murphy said.
Fifty-three percent of firms in the UAE are expected to increase their employee salaries next year.
The report added that more than one-third of companies – 39 percent – have plans to raise wages by up to 5 percent, while almost one in 10 plan to increase salaries by 6 to 9 percent, and one in 20 are preparing for salary increments of 10 percent or more.
However, the report noted that 21 percent of firms surveyed expect to lower their employees’ salaries – a surprising trend given the increased demand for talent.
The International Monetary Fund (IMF) expects the UAE’s non-oil GDP to grow by more than 4 percent in 2024, the report said.
Among the non-oil sectors, real estate, travel and tourism, and aviation will continue to lead the UAE’s economic growth.
Bonuses
More than half of the firms surveyed (71 percent) reported their intention to issue annual bonuses based on their organization’s financial performance in 2023, compared to 29 percent who said they had no such plans, the Cooper Fitch report further said.
“While salaries continue to play a crucial role in talent retention, factors beyond fixed remuneration – such as annual bonuses and the ability to work remotely – are playing an increasingly important role in the UAE’s job market,” Managing Partner and CEO of Public Sector Advisory at Cooper Fitch, Jack Khabbaz, said.
In 2022, a slightly higher proportion of respondents (74 percent) had planned to pay annual bonuses to their employees, the report added.
Thirty-five percent of this year’s respondents intend to issue bonuses and said they expect to pay one month’s basic salary; 17 percent said they would pay two months’ salary, 12 percent said three months, 4 percent said four months, and 1 percent said they would pay five months’ basic pay as bonus, according to the report.
Employees working for 2 percent of this year’s respondents – spanning the fields of accounting, chemicals, consumer goods, and hospital and healthcare – can look forward to bonuses that will amount to a generous six months’ basic salary.
According to the agency, of the 29 percent of companies that do not intend to pay bonuses, the highest proportion operates in the field of financial services – unsurprising, given the reductions in economic growth that international banks faced in 2023.
The second-highest proportion of organizations that do not intend to pay bonuses this year is from the consulting industry, followed by information technology.
More often than not, in such competitive job markets, firms that do not offer bonuses or increased salaries often provide their employees with non-financial benefits – such as remote working, training and development, or additional annual leave – to attract and retain top talent.
Source : Al Arabiya