x Abu Dhabi, UAEThursday 18 January 2018

More than half UAE residents say salaries not keeping pace with cost of living

Take our poll: Two thirds feel they are underpaid in the Emirates when compared to industry peers while nearly 50 per cent said they did not get a raise last year.

More than two thirds of respondants in the UAE to a survey say they are underpaid. Silvia Razgova / The National
More than two thirds of respondants in the UAE to a survey say they are underpaid. Silvia Razgova / The National

More than half of UAE residents say their salaries are not keeping up with the country's high cost of living, according to a new study.

About 53 per cent of respondents believed the cost of living increased by more than 15 per cent last year, says the survey from bayt.com, the employment website.

Some 67 per cent said they felt underpaid when compared with industry peers. The survey also revealed that more than four in 10 people did not get a raise last year, while 60 per cent said they planned to look for a job in the same industry over the next year.

The results "suggest that salaries are not keeping pace with the rising cost of living in the UAE", said Suhail Masri, the vice president of sales at Bayt.com.

"This is a general trend across the Middle East that companies must begin to address; in doing so, they will be able to contribute to building employee loyalty and satisfaction and will have the opportunity to reduce the number of employees looking to change jobs within the next year."

Inflation in Dubai climbed 0.9 per cent last month from the same period last year, higher than the 0.6 per cent annual rise during the month before, according to the Dubai Statistics Centre.

During the month, inflation remained steady, with a 0.1 per cent lift from the previous month. Overall consumer prices in Abu Dhabi climbed 0.6 per cent last month from a year earlier, according to the Statistics Centre Abu Dhabi.

Prices of alcoholic beverages and tobacco increased by the highest amount, climbing 9.7 per cent.

"There are categories, such as education, that experienced rapid inflation. School fees are now at 5.9 per cent, versus the UAE average inflation of 0.9 per cent, said Giyas Gokkent, the chief economist at National Bank of Abu Dhabi.

"Some food items, they are a lot higher than they used to be. Suddenly the grocery shopping becomes less affordable," he said "But when you look forward, inflation is likely to remain subdued. We might touch an average of 1.5 per cent by the end of the year. Remember in 2007, we had double-digit figures of 10 to 12 per cent."

Mr Gokkent said the rent category, which includes housing and utilities, comprises a 39.3 per cent weighting on the index and has declined since the global financial crisis.



"The rent category has been in decline, even though wages stagnated during that period because the job market worsened. Recruitment wasn't strong either. From that perspective, for those who retained their jobs, there would have been an improvement in the living circumstances of their households."

Bayt.com's 2013 Mena Salary Survey interviewed 15,247 respondents in the UAE and wider Arabian Gulf region, the Levant and North Africa. The study was in partnership with consulting firm YouGov.

Separately, Monster.com last week revealed that the number of jobs listed online in April dropped year-on-year by 26 per cent for the Arabian Gulf and Egypt. Kuwait registered the steepest decline over the past 12 months, at 23 per cent.

"The double-digit drop in the Monster employment index is reflective of the cautious approach adopted by Middle East employers owing to the business scenario globally," said Sanjay Modi, the managing director for the Middle East, India and South East Asia of Monster.com "All major industry sectors across Middle East have shown a decline in the hiring activity."