Dubai: Year-ahead forecasts of a 5.8 to 7.5 per cent pay rise for UAE employees by some surveys in recent weeks might be a bit too optimistic, given uncertain economic conditions, suggests a leading UAE recruitment firm.
Despite predicted growth and competition among Gulf countries to attract new expatriate talent, Nadia Associate Director Ian Giulianotti said existing employees shouldn't bank too heavily on the prospect of big raises in coming weeks and months.
Gloomy outlook
"Across the board, companies are not giving pay rises," Giulianotti said. "Companies are offering very little in terms of pay rises."
In the wake of thousands of job cuts in the UAE, it is now an employer's market in which people are holding on to positions they have, he said.
The few employers who are giving small increases this year, will definitely not be handing out bonuses, he said. "If you're lucky enough to get a pay rise, don't expect a bonus," said Giulianotti.
This view flies in the face of job-market surveys by other recruitment firms.
Gulf Talent.com suggested in a latest survey that "regional and international competition for talent is moderate and inflation remains under control. As such, pay increases are likely to be modest over the coming year".
The firm predicted a 5.8 per cent "average pay rise" for the UAE in 2010.
Mercer, an HR consulting company, surveyed its clients and reported that 90 per cent of firms are considering pay increases of seven to 7.5 per cent and that two-thirds of the firms surveyed said they would hire more people in 2010.
But Giulianotti said some employers are highly aware that natural market forces are already giving workers a break.
With inflation predicted to be around four or five per cent this year and housing rental prices reduced in some cases by 50 per cent, some employers, he said, believe workers have financial room to breathe without pay hikes this year.
Silver lining
Employers continue to pay large rental allowances based upon former high rental rates, but Giulianotti said that workers who move are upgrading accommodation for the same rental price rather than rent for lower cost to save money.
