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Over half of UAE firms said their business outlook is ‘ahead’ or ‘well ahead’ of where they thought it would be, while just 3% said it was below expectations. Image Credit: Clint Egbert/Gulf News

Dubai: UAE employers plan to give staff an average annual pay rise of 4 per cent in 2022 as signs emerge of a recovery in the labor market following the turmoil from the pandemic over the last 19 months, according to a report by Willis Towers Watson. The rise is an improvement on the 3 per cent average increase paid out this year.

The findings come as the proportion of businesses expecting to freeze pay altogether is set to tumble from 15 per cent this year to almost zero (0.6 per cent) in 2022.

Over 300 UAE-based firms participated in the study, which was carried out by Willis Towers Watson, a global advisory firm. The survey found that average pay rises in 2022 will be most visible in the medical technology (a projected 4.4 per cent increase), pharmaceuticals (4.3 per cent), and manufacturing (4.3 per cent). Workers in insurance (3.2 per cent), business consulting (3.2 per cent), and energy and natural resources (3.3 per cent) are also due for some good news pay-wise.

These are positive signals in a labour market that has come under heavy stress during the global pandemic.

- Laurent Leclère, Senior Reward Leader for the Middle East

This year, UAE businesses tried to motivate and retain the top performers by giving them a pay rise that was 2.7 times greater than for the rest of the staff with average performance ratings. "Pay budgets have not yet returned to pre-pandemic levels, but employers are showing clear signs of growing optimism,” said Laurent Leclère, Senior Reward Leader for the Middle East. “And they are reflecting that in their plans for higher pay rises. In recent months our conversations with HR leaders and clients have revealed a more upbeat sense of recovery and growth,

• Medtech employees will see the highest pay rise, at 4.4% in 2022.

• Top performers got paid nearly thrice as much as their colleagues in 2021.

• More than a fifth (26%) of surveyed firms plan to recruit in next 12 months.

• Recruitment efforts will focus on sales, engineering (30%), and other technical roles (43%)

• HR (3%), finance (4%) and marketing (20%) will be least active in terms of hiring.

Over half of UAE firms said their business outlook is ‘ahead’ or ‘well ahead’ of where they thought it would be, while just 3 per cent said it was below expectations.

More hiring

Around 26 per cent plan to recruit more staff in the coming 12 months, while only 10 per cent expect to cut headcount. Over half of the firms that are recruiting said they are trying to fill roles in sales, while technical skilled trades (43 per cent) and engineering (30 per cent) are also hotspots. The least active recruitment areas are in HR (3 per cent), finance (4 per cent), and marketing (20 per cent).

“Digital roles will keep commanding enhanced pay packages as we expect trends that started during Covid to continue or even accelerate,” said Leclère.