In UAE, businesses keep hiring but with an eye on inflation costs

Dubai: Worries about inflation and job cuts in the global tech space have so far not slowed down hiring activity in the UAE, with healthcare, ecommerce and fintech still driving a lot of new recruitments. Where inflation-linked changes are happening is on salary reviews and incentives at some organisations.

“Hiring will remain, but the main concern remains in getting clients to pay invoices,” said Nicki Wilson, owner and Managing Director - Genie Recruitment. “Recruitment agencies will have to tighten their belts to ensure they can absorb the costs and afford to keep going. It’s about weathering the storm until the global economy recovers.” Job openings During unstable times, Nicki points out that many companies will opt to look within the organisation for those who could be trained to the next level. Hence, the focus now is how to retain talent they already have.

In the near-term, these are the likely salary packages expected for certain junior- to mid-level positions across different industries are as follows:

Source: Michael Page UAE Salary Guide and Hiring Insights 2022

Less traction in high-end jobs

It is at the upper-middle positions - in roles offering Dh40,000 plus - where there is less hiring thing place, according to consultancies. (The energy, including renewables, is an exception and so is anything to do with digital banking.)

Nicki says this is not a new trend,”We have seen fewer higher-level positions and more senior candidates available on the market for the past couple of years, often having to take a step back in salaries to re-join the workforce.”

Tech in retreat?

Although recruiters globally see inflationary pressures and recession concerns affect the job market, influencing hiring activities across different sectors. In the UAE, inflation’s impact on hiring is not felt, which industry experts foresee could happen in the coming months.

Override inflation worries

Sarah Dixon, Managing Director of Hays in the Middle East, states that inflation in the UAE is relatively low and could be in for a decline in 2023. Moreover, this year, salaries have risen in key sectors, by up to 5 per cent, to offset the spike in inflation.

Many companies consider talent retention an essential factor. Aon’s UAE inflation survey says 74 per cent of firms they studied (from 150 participants) across all industries have felt increasing pressure to maintain their available talent.

Most firms surveyed conduct annual pay reviews, with 49 per cent budgeting for higher salaries considering the increasing inflation. The actual and budgeted amount for the majority of firms’ regular merit increase is between 2-6 per cent.

The results indicate companies would have higher salary increases budgeted for junior and middle management positions compared to top leadership roles.

Four per cent of UAE firms are also planning one-off mid-year pay reviews. Of these, 21 per cent budget an increase of 5-8 per cent, and 24 per cent are aiming to rise over 9 per cent, as per Aon’s survey.

Drive from tourism

In sectors such as F&B and retail, Nicki says the focus is on absorbing costs and that may affect recruitment. And heading into the final months towards peak tourism, the question is whether visitors will be tightening their belts.

Already, in F&B, there is less hiring activity compared to the mass job creation experienced post-pandemic. Clearer insights will be known by end-September which is when companies typically start planning their next year staffing requirements. And their salary hikes/incentives…