UAE businesses confident of economic recovery next year
February, 04th 2011
DUBAI - Businesses across the UAE have are confident that the next year will be a turning point in their economic recovery, a new survey from the global HR firm Mercer has found.
Mercer’s 2010 total remuneration survey for the UAE shows a big jump in the numbers of firms planning to hire more people in 2011 and to raise pay levels during the coming year.
The period of reducing staff appears to be at an end in the country, Bassam Gazal, who heads Mercer’s survey practice across the Gulf, said, adding: “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.”
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.
Abu Dhabi is still leading the way. 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 UAE survey project manager, Oxana Nagy, noted that there also is a strong shift in Abu Dhabi and Dubai — and elsewhere in the region — around the payment of variable bonuses to employees based not just on individual performance but on corporate performance as well.
Nagy said the trend was stronger the higher up the management level, and executives in particular had felt the impact of weakened results with bonus payouts for this level reportedly down on the year before.
The survey covered a range of sectors including energy, high-tech and consumer goods and highlighted compensation trends ranging from top executives to the administrative level.
Mercer conducts the same survey across more than one hundred countries and covers over 450 benchmark positions.
The UAE survey included over 140 firms spanning more than one hundred thousand employees.
The survey also disclosed 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,” Gazal said.