x Abu Dhabi, UAEFriday 28 July 2017

Pay rises on the cards for UAE workers next year

A growing number of employers are hiring in the UAE, but the demand is less than was expected, according to a new survey.

A survey of more than 300 companies across all industries in the UAE showed that most of them expect to hand out raises of 5.5 per cent next year. Jeff Topping / The National
A survey of more than 300 companies across all industries in the UAE showed that most of them expect to hand out raises of 5.5 per cent next year. Jeff Topping / The National

Workers in the UAE can expect something unusual next year - a pay rise.

That will not be happening in most other nations, according to the latest data from the consultancy Mercer.

A survey of more than 300 companies across all industries in the UAE showed that most of them expected to hand out raises of 5.5 per cent next year. Their counterparts in Qatar and Saudi Arabia plan to raise salaries by 6 per cent.

Mercer cautioned, however, that many companies were concerned about the effects of social unrest across the Middle East and North Africa (Mena), and about the uncertain outlook for the US and European economies.

"Broadly, economic activity across the Mena region has been solid in most areas, but confidence and optimism has been buffeted by pockets of social unrest, in what has been a period possibly unique in the Middle East in the modern era," said Zaid Kamhawi, who heads Mercer's surveys in the Middle East.

The survey also found that annual base salaries in Abu Dhabi are about 7.5 per cent higher than in neigbouring Dubai, while average housing allowances are 21 per cent higher. Another study, by the recruitment firm Antal International, found more employers in the UAE are hiring, although in a sign that some are becoming increasingly cautious, their demand for new workers is less than they had previously projected.

Sixty-two per cent of organisations in the UAE say they are hiring at the managerial or professional level. While that figure was up 3 per cent from a previous study in July, it is less than the 68 per cent of employers who had expected to be hiring for new positions this quarter, according to Antal, which surveyed more than 19,000 organisations in 52 countries last month and is releasing its study in the UAE today.

"Hiring was short of expectations," says Nizar Lallani, the chief executive and country manager for Antal in the UAE. "The biggest worry right now is the euro zone."

Despite economic concerns over the euro zone, the UAE's appetite for new employees is still healthier than the global average, where 56 per cent of organisations say they are hiring. Downturns in other parts of the world have caused employers to take far more drastic action than either in the Emirates or the wider Gulf region.

In France, 27 per cent of organisations say they expect to lay off employees at the managerial or professional level over the next quarter, while in Greece the figure is 30 per cent. In both countries, more than a quarter of all employers surveyed reported that they were letting some of their staff go.

The employment outlook is much more optimistic in the UAE.

Layoff rates have fallen by 5 per cent compared with what employers reported in July, according to Antal's data. And 11 per cent of employers expect to lay off workers during the next quarter, which is steady from July and up just slightly from 9 per cent in March.

Some executives say turnover in their industry is much lower in the UAE than in their home countries.

Tim Hortons is a coffee and doughnut chain with most of its shops located in Canada and the US, where between 22 and 26 per cent of employers have reported laying off workers, according to Antal.

But Tim Hortons in the UAE has been busy hiring for its first location in Dubai, which opened this year, plus four more shops that launched last week.

"I think the labour situation here is very different from home [in North America]," said Paul House, the executive chairman of Tim Hortons who was in Dubai last week.

"You have a pretty stable workforce in this industry [in the UAE]," he said.

Still, there is less hiring going on in the UAE compared with other countries in the Gulf.

Qatar currently ranks third in the world overall when it comes to the number of employers who say they are hiring, while Saudi Arabia comes in at sixth place. The UAE is 15th.

A separate survey released last week by the job site Bayt.com found that about a third of professionals in the Mena region are considering shifting to a new industry for work.

Many of these employees often scout out new jobs "in order to see optimal salary changes", as well as to jump-start a career that seems to have "plateaued", said Rabea Ataya, the chief executive and chairman of Bayt.com.

"It makes sense from a financial perspective to look at different industries," he added.

Yet workers in the Emirates may encounter difficulties switching fields if employers continue to downgrade their hiring outlook.

Fifty-eight per cent of organisations say they intend to hire over the next quarter, down from 68 per cent in July, said Antal.


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