Salaries may rise 4.5%
dubai — Salaries in the UAE are likely to rise 4.5 per cent in 2020 with the highest increase expected in the life sciences industries at 4.6 per cent, according global consulting firm Mercer’s remuneration survey released on Wednesday.
Apart from life sciences, strongest push in salary hike is likely to come from the high-tech industries as well. While the energy industry continues to see some of the lowest increase in salaries with a projected 3.7 per cent increase in 2020, compared to a 3.6 per cent increase in 2019. Other sectors that could see low increases will be retail and construction.
“The reasons we see big increases in life sciences is because this industry has strong demand and is leading the pack,” said Ted Raffoul, Career Products Leader, Mena at Mercer.
“It is very encouraging to see that a large segment of UAE employers are looking to increase salaries in 2020. This is a reflection of a resilient and optimistic economy. The UAE is constantly looking at new approaches to progress and develop the workforce further. In addition to annual increases in base salary, UAE companies are also making progress in regards to long-term incentives,” said Ted Raffoul, Career Products Leader, Mena at Mercer.
“The recent introduction of enhanced employee benefits in DIFC, for example, will help companies attract and retain the valuable talent needed to advance and transform different sectors in the region,” he added. Raffoul said the UAE economy will pick up pace, as per forecasts by the IMF, in the coming years, hence certain sector would hike in salaries.
Notably, companies are providing higher increases to executives and managers than they are to other employee levels, signalling increased attention to leadership skills, Mercer said.
Analysts say that pay gap between a young entrant and a senior managerlevel job in the UAE and GCC has been on the rise over the last 10 years in the UAE and other Gulf countries. But majority of firms face challenges in sourcing senior level employees with right skills than junior level workers.
“The pay gap has increased in the UAE and other GCC countries over the last 10 years. The basic underlying reason for this is supply and demand in the labour market. For lower level jobs, there is little upward pressure on pay, mostly because there is not an acute shortage of workers for lower level jobs,” says Benjamin Frost, solution architect at global consultancy firm Korn Ferry.
Mercer survey disclosed that voluntary turnover has increased to more than seven per cent, signifying a more active job market. The survey found that the overall hiring outlook in the UAE is also positive with 45 per cent of respondents planning to increase their headcount and 52 per cent looking to maintain headcount in 2020.
Raffoul said the low ratio of women in leading roles across the UAE is concerning, especially because the current roles predominantly held by women will eventually become obsolete due to
the increase in automation among various sectors.
Regionally, Kuwait and Qatar will be at par with the UAE at 4.5 per cent increase in salaries while Bahrain and Oman will see 4.0 per cent hike in salaries. The fastest growth in the Gulf region is expected in Saudi Arabia at 4.8 per cent.
In the UAE, more than 500 organisations were surveyed in the manufacturing, retail and wholesale, services, chemicals, life sciences, high tech, energy, and other industries.