Many funds that take a performance bonus fared worse than average over five years, once fees are taken into account. Picture for illustrative purposes only. Image Credit: Supplied

Dubai: Only a small number of workers in the UAE and the rest of the Gulf Cooperation Council (GCC) region can expect to receive bonus payments this year, according to the latest study on compensation and benefits.

In a survey among hiring professionals, including salary and benefits managers who are mostly based in the UAE and Saudi Arabia, it was found that the majority (35.3 per cent) are unsure whether or not their company should be handing out bonuses to their staff in 2018.

An additional 9.84 per cent are also uncertain, but said that if their company decides to be generous this year, the bonus amount will most probably be lower than what their staff received in 2017.

The responses were gathered by the Compensation and Benefits Forum and The HR Observer, a platform for human resources experts in the region.

Among those polled were respondents from various companies in healthcare, retail, hospitality, construction, real estate, banking, financial services, education, government and consulting, among many others.

According to Agni Skafidas, managing director at Olam, and the compensation and benefits expert who helped analyse the findings of the survey, most respondents are not sure about any bonus payments, as organisations adjust to a new tax environment and remain cautious amid the current economic conditions.

Employers may also opt to use any spare budgets to fund training and development programmes for their staff, as organisations put emphasis on staff retention and higher employee engagement and productivity levels at the same time.

“This could be due to the implementation of VAT and their desire to see how the company is performing during the challenging economic conditions,” Skafidas told Gulf News.

“As companies are also using this year to review their total compensation packages, they may use any funds for aligning their salary and allowances structures to the market. This gives employees a higher guaranteed income but also works as a retention tool."

“Companies may use any bonuses for learning and development programmes. This came out very clearly as one of the areas companies will focus on this year.”

As far as pay adjustments are concerned, only 20.96 per cent expect to give a 3.5 per cent increase or less, while 8.95 per cent are planning to hike wages by 4  per cent. About the same number (8.72 per cent) may grant a salary increase of 5 per cent.

“The majority of our 2018 survey participants do not have an optimistic outlook for their prospects of increasing salaries this year,” organisers of the study said.