Companies in the UAE may not necessarily open up their purse-strings and offer a fatter pay cheque to employees this year.
The latest salary guide from professional services recruiter Morgan McKinley indicates a scenario where salaries are expected to remain broadly flat in 2016.
Until the very end of 2015, the recruitment firm has predicted a bumper year in 2016, in terms of both the creation of new jobs as well as salary growth, but it has now revised those expectations downward.
This, of course, isn’t great news for employees and candidates.
As per the recruiter’s predictions, salary growth is expected to drop below current levels or to remain flat for the year ahead.
“We are predicting that, for the full year of 2016, salary [hikes] could drop to as low at 2 or 3 per cent below certain levels or remain relatively flat depending on commodity prices,” the salary guide states.
The report also highlights that instead of looking at bigger payouts this year, employees should be more concerned about remaining employed.
“There are significant divergences around this forecast with some sectors likely to perform better than others, leading to respective salary growth. We are hopeful that salaries will increase above 2015 levels in the second half of 2016, but this will largely depend on what happens to oil prices as the year progresses,” reads the report.
According to Mercer Middle East’s 2015 Total Remuneration Survey, released in January, salary increase forecasts for 2016 in the UAE and Qatar are now recorded at 4.9 per cent – a figure below five per cent for the first time in five years.
Some recruitment companies in the country had taken a similar cautious outlook, estimating that pay hikes in store for UAE employees will be well below the five per cent-mark.
Towers Watson’s salary budget planning report maintains 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 pay hikes were the same and is expected to be marginally lower than 2015.
Consultancy Aon Hewitt, however, maintains 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.