Nearly 20% of businesses freeze salaries

Some of the bigger organisations have already gone through the process

Nearly 20 per cent of businesses operating in the UAE have put a freeze on salaries, while 30 per cent “have” plans to cut their workforce numbers, according to the annual survey conducted by the consultancy Mercer. And 17 per cent of companies delayed handing out 2020 salary increases after the COVID19 strike, most likely by six months or so.

These are the stark numbers generated on what UAE businesses are doing to cope with the pandemic fallout.

Some of the bigger organisations have already gone through the process of headcount reductions, while salaries were cut by 30- 50 per cent. Some of themstill retain the salary cuts, until further notice. According to Ted Raffoul, Career Products Leader — Mena at Mercer, “10 per cent of companies reduced salaries, but almost all of these were on a temporary basis.

Where salaries could rise

Although uncertainty continues into 2021, UAE companies are making progress towards enhanced business strategies, with a majority expecting new working arrangements to continue to evolve towards permanent policies.”

The biggest gains could be in life sciences ( 4.5 per cent) and consumer goods ( 3.8 per cent) industries. But the energy industry will likely see some of the lowest increase in salaries with a 1.9 per cent forecast, according to Mercer.

The 30 per cent of organisations planning job cuts expect an average 10 per cent reduction in their workforce. The biggest impact will be felt in retail, and if December/ January sales do not pan out as retailers expect, this is where the pink slips aremost likely to emerge from.

Among those industries seeing gains in headcounts is logistics, specifically for express and last- mile services, driven by e- commerce demand.