Employers plan bonuses, allowances instead of salary hikes for 2023
Salaries in the UAE are expected to remain stable next year despite the rising cost of living and companies in the UAE are making changes to overall packages rather than increasing salaries, say human resources consultants.
While salaries are stagnant, businesses are taking steps to make sure the cost of living is less restrictive for their employees, according to Robert Half's 2023 Salary Guide.
“The rising cost of living is pushing businesses to review the benefits they offer, cutting overheads to improve their offering. Some employers are providing extra bonus payments, while others are increasing allowances for housing or healthcare,” it said.
In order to beat inflation, 31 per cent of employers are offering high or extra bonus payments, 31 per cent are increasing regular allowances and 27 per cent of employers allow employees to sell back annual leave days.
However, Robert Half added that opportunities for senior professionals are limited, but the market is booming for junior and midlevel candidates in the UAE.
“Rather than hiring new talent into the business at the most senior levels, many organisations are promoting from within. As candidate supply does not meet business demand in the UAE, career progression opportunities can help to retain highly-skilled employees,” said Robert Half in its latest report.
It warned that with a tight hiring market, employers should beware of a potential exodus during 2023, as 46 per cent of workers is considering a change. Meanwhile, more than a quarter — 28 per cent — of employees are planning to look for a new job before the end of the year, the global HR consultancy said.
“With the cost of living increasing quickly, it is no wonder that nearly half of employees are considering a new role in 2023. Employers should act now to retain their best talent or they could find it difficult to take advantage of growing opportunities in the UAE economy,” said Gareth El Mettouri, associate director for the Middle East.
The report said more than half — 52 per cent — of employees have noted an increase in colleagues leaving their company, corresponding with a decrease in employee satisfaction.
The study found that 56 per cent of employees in the UAE are looking for new jobs as they need a higher salary to meet obligations, 37 per cent lack benefits, 36 per cent lack career progression or training and 39 per cent report poor or uncompetitive pay.
However, businesses are hiring to fill both vacated roles and newly created roles, as confidence in the economy increases.