UAE firms resisting pay-rise demands as inflation climbs, survey shows
In the United Arab Emirates, two-thirds of companies have received salary requests to offset the impact of inflation, according to a survey.
A Mercer survey of 200 local and international companies in the UAE, which surveyed 200 companies in 2022, found only 16% of them had taken any action to retain talents, such as one-time payments, off-cycle salary increases, or housing allowances.
The Central Bank of the UAE projects inflation at 5.6% this year, which is lower than other parts of the world but would be the country’s highest rate since 2016.
Mercer also said that Dubai, the UAE’s commerce hub, is one of the most expensive cities for expatriates to work and live in this year, according to a separate survey.
However, 47% of firms in the UAE will not be taking any action in 2022, whereas 37% are either weighing or planning some kind of off-cycle compensation adjustment in The UAE business sector has been growing at its fastest rate in 38 months in August, with the non-oil private sector seeing its fastest growth in 38 months. The growth of the non-oil private sector means that companies will need to maintain their talent level in order to keep up with the
“Employers are being cautious about immediately bumping up wages to match inflation, and many are considering short-term actions with less permanent implications such as lump-sum amounts or retention bonuses, or are investing in improving employees’ work experience by offering improved work-life balance, flexibility and training,” Andrew El Zein, a senior associate consultant at Mercer, said in a statement.
In spite of this, companies are planning to increase pay rises next year, which will ultimately offset employees’ inflation concerns and match their rising expectations of pay increases.”
The national budget of American companies in 2023 will include a 5% salary hike, above the 3%-4% increase that firms in recent years have budgeted, according to Mercer.
Source- Reuters
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