65% of UAE organisations to raise salaries this year: Survey
Increases expected to be in the range of 2.5 to 4.5%
Dubai: Salaries in the UAE are expected to go up in 2019, say HR and management consultancy firms, with one survey finding that the increases are expected to be implemented by 65 per cent of organisations.
The study by Dubai-based organisational consultancy Korn Ferry has covered 600 organisations with 429,563 employees across major industries in the UAE.
Harish Bhatia, regional director, Middle East & Africa, Korn Ferry, said, “Sixty five per cent of the organisations are forecasting an increase in salaries this year. The actual increases may be dependent on how the global, regional and local economies perform in the coming months. As of now, the salary increase forecast ranges between 2.5 and 4.5 per cent.”
According to Jaya Bhatia, managing director and HR advisor, JOBHUNT HR & Management Consultancy, the salary rise could go up to 12 per cent is some sectors.
She said, “Salaries are expected to rise by 4-12 per cent in sectors like transportation, food and events. In 2018, the majority of hirings was for the posts of chief executive officer, chief financial officer, tax accountants, finance, business development, sales and IT professionals. In 2019, the predominant demand will be for positions in sales, marketing, social media, accounts and information technology.”
Sixty five per cent of the organisations are forecasting an increase in salaries this year. The actual increases may be dependent on how the global, regional and local economies perform in the coming months.
She said, “Salaries are expected to rise by 4-12 per cent in sectors like transportation, food and events. In 2018, the majority of hirings was for the posts of chief executive officer, chief financial officer, tax accountants, finance, business development, sales and IT professionals. In 2019, the predominant demand will be for positions in sales, marketing, social media, accounts and information technology.”
She said sectors like hospitality, travel, tourism, food and beverages, FMCG and retail will also see a number of recruitments due to an increase in the number of tourist/visitor arrivals.
Harish Bhatia said, “Organisations in the UAE have been growing very rapidly over the last two decades, naturally most industries had to bring in more resources for this growth phase. Now with overall market conditions stabilising, we see an increased emphasis on efficiency of costs, including labour. Hence, we’ve seen a relative slowdown in overall increase of new jobs in the economy.”
Salaries are expected to rise by 4-12 per cent in sectors like transportation, food and events.
He said the UAE is a very diverse economy with a constantly growing affluent population. “Decisions by the government in 2018 on visa regulations will also drive longer-term commitment and planning by the expatriate workforce. This is good news for the business and economy where consumption will eventually increase impacting businesses in a positive way and hence, also create more jobs in the economy to fill capacity and capability gaps.”
He said economic forecasts as per global standard sources also highlight that inflation in the UAE will be controlled in the range of three-four per cent, which may result in a positive growth of spending power for the workforce.
“With reduced rentals, some residents of the UAE have also benefited with reduced fixed living costs,” he added.
Recent trends in salary increments and their impact
According to Harish Bhatia, regional director, Middle East & Africa, Korn Ferry, the past decade has seen major changes in the way employees are compensated in the UAE. Here’s an outline, along with some tips on what employees can do to get a possible salary hike:
■ Nature of compensation: Average number of years that expats live in the UAE to work, earn and save has increased because UAE as a rapidly growing nation also provides for a high standard quality of life. With this shift from assignment-based expats to non-national long-term permanent residents, organisations are changing their approach to compensating the workforce. They are now paying salaries as compensation for work and some assistance with other expenses; instead of covering responsibility for all individual living expenses — such as full housing allowance, cost of education etc.
■ Holistic experience: Employers now seek to provide a holistic experience and package to their employees which covers market-linked cash salaries, recognition for high performance with bonuses, a safe and encouraging work environment and options to learn and develop oneself, besides well-being and culturally inclusive programmes that foster diversity.
■ Selective increments: Companies are ensuring that most part of every additional dollar or dirham spent on salary increments is allocated to high performers or high potential employees. This is a good practice as long as the organisation and employees have transparency and trust in the performance management system and processes overall.
■ What can employees do? Employees should ensure they understand their KPIs clearly and ensure they focus on achieving or surpassing their key goals so they belong to the select group of employees which are valued and rewarded additionally with bonuses or salary increments
■ Purchasing power: In the past five years, we’ve seen flat or nominal increase in real pay (average pay increments – local inflation) with exception to last year, where published inflation figures were higher than the average increments, eroding some purchasing power for people in the UAE.