UAE jobs: 'Cost of living' main reason for employees switching jobs

Dubai: The cost of living – especially those related to rents and education expenses – are now the main reason why employees in the UAE are opting to switch jobs, according to new data from the placement consultancy Korn Ferry Digital.

While UAE employers have sought to compensate through salary increases, the majority of organizations have only provided hikes of 4% or thereabouts. But even then, these are not enough to make up for the other costs that individuals have to factor in. For instance, when it comes to rents, salaried individuals would have seen their annual payouts to landlords go up by 15%-20% in the last two-three years.

And you have two out of every three employees saying that rising cost of living is outpacing their salary gains, according to Korn Ferry.

“Employees are facing increased costs of living - as a result, benefits and pay have become the leading reason for leaving companies,” said Vijay Gandhi, Regional Director—Europe, Middle East, and Africa (EMEA) at Korn Ferry Digital.

Other hiring trends’ reports back this up. Plus, the inflow of more first-time residents to the country have meant that there are more candidates putting up their CVs for the same job. That too has meant salaries seeing marginal rises or even staying the same for junior and mid-level roles in an organization.

Now, it doesn’t help employers if key personnel are always thinking of making a move rather than stick with the organization and hope to work on their career progress from the inside.

According to the Korn Ferry data, those employees who worry about cost of living issues are:  

·       More likely to leave their job within three months.

·       Increasingly focused on the full compensation package (salary and benefits).

·       And more willing to stay in a job they dislike if the pay is high enough.

 “Employers need to realign pay with regional cost of living and market rates,” says the report. “Without action, they risk losing top talent and weakening their competitive edge.

“Benchmarking rewards against global and regional data—while tracking employee sentiment through listening tools—is essential to staying competitive.”

Employers in the UAE also need to factor in what they have to pay as corporate tax. (You can see the trend in the costs incurred by UAE’s listed companies on the tax front in their recent financials.)

Across multiple sectors, businesses are ‘slowing down’ on hiring new to manage their tax costs better.  

“At the same time, the growing influx of people moving to the UAE for opportunities is putting additional pressure on the job market,” says the Korn Ferry report.

“As a result, job security has become a growing concern among professionals. Many are now more inclined to switch industries in search of stable opportunities and long-term security.”