Mercer expects UAE salaries and hiring to increase in 2022 as job market opens up

Employers in the UAE are set to go on a hiring spree in 2022 and raise salaries by an average 3.6 per cent as demand for jobs pick up amid the UAE’s post-coronavirus economic recovery, a report by Mercer found.

Attracting and retaining employees will also require an increased focus on flexible working policies such as hybrid or remote working, Mercer said in its 2021 Total Remuneration Survey yesterday.

Mercer polled 599 UAE companies across a range of industries, including manufacturing, retail and wholesale, technology, chemicals, consumer goods, life sciences and energy.

“Signs of growth abound and are evident in the increased hiring activity that we have seen in 2021 and the positive forecast for 2022,” said Andrew El Zein, a career department associate for the Mena region at Mercer.

“Employers are prioritising hires for in-demand skill sets that will support future business growth. However, the talent pool is still developing, causing somewhat of a talent war.”

Since the Covid-19 pandemic began in March last year, the UAE has spent billions of dirhams in economic stimulus to support businesses.

Business activity in the nonoil private sectors of the Arab world’s second-biggest economy continued to improve in October, boosted by the easing of restrictions, a rise in tourism and increased spending amid the economic recovery.

The UAE’s headline PMI reading climbed to 55.7 in October, from 53.3 in September, underpinning a marked increase in new business, driven by rising spending amid the opening of Expo 2020 Dubai.

A reading above 50 indicates economic expansion while anything below points to a contraction.

The findings from the Mercer survey suggest an overall salary increase of 3.6 per cent in 2022, which is slightly below 2019 and 2020 figures of 4.5 per cent and 3.8 per cent, respectively.

However, 14 per cent of companies froze salaries in 2020 while this dropped to 10 per cent in 2021, the Mercer study found. For 2022, Mercer expects only 5 per cent of companies in the UAE to freeze salaries.

“To attract and retain top talent, employers must look to maintain pace with market-wide salary growth and benefits,” Mr El Zein said.

“Optimism is strong when looking at 2022, with many UAE companies forecasting a higher wage increase to attract and retain top talent, particularly in competitive fields.”

The technology and energy sectors are lagging behind slightly on salary increases of 3.5 per cent and 3.4 per cent, respectively, the survey found.