Salaries in UAE rose 5%

Salaries in the UAE have risen by five per cent over the last 12 months while recruitments have recorded growth and layoffs are stopped, said global management consultancy firm Hay Group in its annual report.

The report, which analyses salary information for more than 200,000 employees in 488 companies in the Emirates, said the UAE national graduates command a premium as do those working in Abu Dhabi.

“There are 37,000 new recruits this year according to our data compared to 25,000 in 2010 and recruitment is primarily for sales and marketing roles. This new wave of recruitment can be attributed to an improvement in business performance on last year and because new recruits can be sourced at below the average market rate. A new employee in the Emirates can expect to be paid six per cent under the market average. We are not witnessing layoffs anymore apart from in a few organisations in real estate,” Hay Group’s Vijay Gandhi, Director of Reward Information Services, said.

“Our data shows that UAE nationals are paid 33 per cent more fixed pay than the general market. The biggest gap between nationals and non-nationals is for entry level positions where demographics of the country mean young Emirati talent is scarce,” said Gandhi.

“Retention of nationals is at the top of the HR agenda and in addition to pay, our clients tell us they are broadening their initiatives to attract and retain Emirati talent. Schemes such as internships and job rotation are paired with attractive reward packages,” he said.

Pay within the Emirates

The difference between pay in Dubai and Abu Dhabi still exists but the gap is narrowing. This year base salary is paid at an average of 20 per cent more in Abu Dhabi which is a smaller differential by 10 per cent when compared with two years ago. This is largely due to housing allowances in Abu Dhabi which have stabilised as more accommodation has come online. Housing allowance is now 27 per cent higher in Abu Dhabi than Dubai, compared to a 35 per cent difference in 2010, according to the Hay Group.

Employee benefits

The report finds that the provision of benefits such as education allowance and medical insurance is a concern for employers.

“Employers are faced with the challenge of escalating benefits costs. They are being pushed to pay more, but employees only see the same level of benefits.” said Gandhi. “For example, education costs have increased by 20 per cent over the last twelve months. However our data shows that education allowances have not matched this, with the average increase being 8 per cent this year.”

He continued. “As employers battle with increasing benefits costs including insurance premiums, employees may experience a reduction in their benefits such as the removal of dental and vision provision from healthcare policies and a restricted choice of hospitals.”

Looking forward to the next 12 months, Hay Group forecasts pay increases of 5.2 per cent. This is further evidence of the stabilising pay market in the Emirates as organisations are now in a better position than two years ago to forecast business performance.

Organisations from the public sector, banking and real estate make up some of the 16 key sectors that participated in this year’s study.

Follow Emirates 24|7 on Google News.