A survey has found a big jump in the number of UAE firms planning to hire more people in 2011 and to raise pay levels.

Businesses across the UAE have issued a strong signal that 2011 will be a turning point in their economic recovery, a survey from the global HR firm Mercer has found.

According to Bassam Gazal, who heads Mercer's survey practice across the Gulf, the period of reducing staff appears to be at an end in the UAE.

"Two-thirds of the 140 firms we surveyed across the Emirates told us they would raise headcount in 2011. Not one firm we spoke to was planning to cut numbers. This is a big shift in mood and in planning and we expect this optimism to deepen as the New Year comes around," he said.

The prospect of a 2011 salary increase across the UAE is also looking firm, with the average increase forecast to be around 6.2 per cent, up from 5.2 per cent for 2010, and no firm reported they were considering a freeze.

At a city comparison level, Abu Dhabi is still leading the way, the survey that included over 140 firms spanning more than one hundred thousand employees, said.

For 2011, the average salary increase in Abu Dhabi is set to be 1.3 per cent higher than the figure for Dubai. Also the housing allowances still remains a dominant cash allowance in the UAE with a difference as high as 43 per cent between the two emirates.

The survey also found that on average local companies pay 27 per cent higher base salaries across all employee levels, while the average guaranteed cash difference between local and multinational companies is as high as 33 per cent.

"Although the salary increases we are seeing for 2010 and the forecast for 2011 are not as high as the increases prior to the crisis, those increases are higher than inflation, which means that the purchasing power of the individual is increasing," said Gazal.