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09 December 2023

Half of UAE employees to get 10% pay hikes in 2016; will you?

By Shuchita Kapur

A good percentage of employees working in the UAE and the GCC speak of receiving no hike in salary last year but, surprisingly, a similar number report of receiving increments, and that too of a decent 10 per cent jump.

The data released by Hays GCC 2016 Salary & Employment Report reveals that, last year, almost half the respondents who participated in this survey (45 per cent) received an increase in excess of 10 per cent of their annual pay, and this is expected to continue in 2016.

Of those who did receive the elusive pay hikes last year, 25 per cent were individually determined rather than a company-wide increase (23 per cent). The report suggests that proactively seeking a pay rise is a productive strategy at a time when large-scale across the board increases are unlikely.

It also highlights that 48 per cent of employees received no change to their salary, and this too is expected to continue in the year ahead.

The survey, which was completed by over 2,400 employees and 200 employers, forecasts mixed fortunes for employee salaries and job prospects over the next 12 months.

The New Year is also expected to be a less buoyant one for salaries in the GCC compared to the previous 12 months.

Overall, employers’ sentiment for the year ahead is positive but is lower than last year. The figures indicate 49 per cent of employers feel positive about 2016 compared to a higher 69 per cent who felt the same in 2015.

“There are many mixed messages around salary and expectations in the GCC hiring market,” says Chris Greaves, Managing Director, Hays Middle East.

“On the one hand, the low energy prices and increasingly volatile political situation in the Middle East have led to companies being very careful when addressing any new risk and taking a cautious approach to growth in order to reduce costs.

“On the other hand, we continue to see a large amount of fluidity in the hiring market with much activity still to come, not least from the growing number of start-ups locating in the region. We are also seeing ongoing demand for candidates across a broad range of sectors as diversification of the economy, away from oil and gas, continues to intensify.”

The market is also witnessing more staff turnover. The report found that a significant number of survey respondents (31 per cent) changed company in 2015 and 57 per cent intend to do so in the next 12 months.

While this figure is down on findings from last year (78 per cent), there is much optimism with regards to salary and job prospects for 2016. Sixty-five per cent of employees surveyed feel positive about their career prospects.

Previous reports point out employees in the UAE maybe faced with lowest pay hikes in 2016 over a five-year period.

According to Mercer Middle East’s 2015 Total Remuneration Survey, salary increase forecasts for 2016 in the UAE and Qatar are now recorded at 4.9 per cent – a figure below 5 per cent for the first time in five years.

Some recruitment companies in the country have taken a similar cautious outlook, estimating the pay hikes in store for UAE employees will be well below the 5-per-cent-mark.

For example, Towers Watson’s salary budget planning report, shows that UAE and GCC employees are set to get a pay rise of an average 4.8 per cent in 2016.

This marks a return to 2014 when the pay hikes were the same and is expected to be marginally lower than 2015.

Consultancy Aon Hewitt, however, predicts that UAE firms project a 5 per cent increase in pay in 2016, up from the 4.8 per cent projection made for 2015. In terms of actual increases for 2015, the UAE recorded a 4.8 per cent increase.