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Sun 11 Dec 2011 11:08 AM

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Pay rises likely for UAE workers next year

Poll shows firms in wealthy UAE, Qatar, Saudi set to hike salaries, hire workers in 2012

Pay rises likely for UAE workers next year
Salaries in Abu Dhabi are on average 7.5% higher than those in Dubai
Pay rises likely for UAE workers next year
Salaries in Abu Dhabi are on average 7.5% higher than those in Dubai

Workers across three Gulf countries are in line for a pay rise in 2012 as companies fatten wage packets in a bid to retain talent, a Mercer poll published on Sunday has found.

Companies in the UAE plan to raise salaries by 5.5 percent while their counterparts in Qatar and Saudi Arabia see pay hikes of six percent, the survey of 300 firms in the Gulf countries found.

But Mercer warned that many companies remained wary of the impact of the Arab Spring upheaval and the potential fallout from the euro zone’s debt crisis on local economies.

“Broadly, economic activity across the MENA region has been solid in most areas but confidence and optimism has been buffeted by pockets of social unrest, in what has been a period possibly unique in the Middle East in the modern era,” said Zaid Kamhawi, of Mercer Middle East.

The survey also found that salary gaps are widening between multinationals operating in the GCC and homegrown firms as the fight to attract and keep employees intensifies.

“In the UAE, local firms pay on average 17 percent more than multinational firms, and it widens towards lower level positions,” said Kamhawi. “On average, base salary payments in the UAE are on par but in terms of allowances, the average difference is 44 percent higher in local firms.”

The base salaries of workers in Abu Dhabi are on average 7.5 percent higher than those on offer in Dubai, while housing allowances are about 21 percent higher, Mercer found.

In Qatar, the pay gap is even wider with local companies paying an average of 43 percent more than multinational companies. On average, the base salary gap is 26 percent and in allowances the average difference is 60 percent.

“This is largely because of the diverse range of allowances local firms pay. Multinational firms offer a range of other elements – many of them not directly linked to compensation – that employees and candidates find valuable and that companies use as tools to attract, retain and develop their talent," said Kamhawi.

“But the existence of the gap continues to serve as a reminder that the fight for good talent will only intensify in the short term.”

Analysts said last week that fresh job cuts could be expected in the UAE as companies look to rein in costs amid fears a slowdown in Europe and the US could affect the Gulf state’s economy.

Jobs in Abu Dhabi’s construction industry are likely to be the most affected as state-backed firms reassess their budgets, said Ayesha Sabavlava, UAE country economist at the London-based Economist Intelligence Unit.

[Click here to see firms that have recently announced job cuts]

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Jayan 7 years ago

I don't know which companies are being referred to here. Definitely and for sure construction companies are not part of the survey

Sameer 7 years ago

Construction industry is the most sensitive industry; as jobs in this industry are first in the line of fire. It is always to be prudent and never plan for long stay in foreign countries especially if one is working in construction firms, 2009-2010 many families, school going children had to pack their bags and leave the country, With Abu-Dhabi holding back on projects; It appears that the job cuts is on the anvil and more families will be sent back. As an expat its pity, as one participates in the development and shown the door when jobs done. Its Abu-Dhabi now Qatar will follow; Its time to think of self employment or switch professions were long term stability in employment can be offered.

AAA 7 years ago

Can't rely on this news. Currently job retention is the prime target in the market

sanober 7 years ago

Very true but I guess a little bit of space creating in UAE market

Louie Tedesco 7 years ago

Can any reader describe the feeling of what it’s like to receive a 30, 50 or 100% salary increase from one day to the next for reporting to the exact same job? To me, it is simply mind-boggling to even try to imagine a doubling of my salary for doing the exact same work, at the same level of responsibility as before.

I have been working my entire adult life with regular promotions, except since arriving in Dubai, and never enjoyed more than a 10% pay increase.

For those in quasi government-private sector jobs, it seems more like we will be facing salary CUTS next year. No profit, no salary increase. Losses made, then salary cuts. The money has to come from somewhere!

Actual Qualified Teacher 7 years ago

It is still not clear if this applies to Citizens only.
The general opinion is that it will.
Does this mean I will now have a 1/2-1/4 of the salary whilst being expected do three times as much!!? Would someone,with some authority, like to clarify?

james t 7 years ago

well, your salary is tax free so you contribute nothing in terms of fiscal input to the government who is providing you with its services......and as its tax free, thats an uplift of 35% at least on what you were earning before...plus the dollar has increased over the past year, so more money for you, plus cost of living is less in gcc countries compared to where you came from...so what are you complaining about?
you always know where the airport is if it gets too much...just try and settle your debt on your way out and not do a runner like your contrymen.....

charles 7 years ago

well done James t, for proving that discrimination is alive and well and firmly promoted in your mind.

kingkaiser 7 years ago

@ James - so many things wrong with your assertations.
1. We pay indirect taxes here: higher prices of electricity/water, visa fees, 5% municipality taxes, higher cost of goods relative to most markets. The state makes money of us - it just doesnt come directly off your paycheck.
2. Tax free coupled with lower salaries (salaries here are NOT higher in most industries) leaves you almost flat.
3. Dollar increase helps only if you're converting almost all your assets to Euro. Plus this is volatile and can turn around in a second.
4. Cost of living isn't lower compared to most countries anymore. I admit London is pricey, but go to most cities in Europe or US, and you'll find Dubai quite expensive.
5. Why is no one allowed to discuss their grievances here without being hauled onto a plane!?

gordon 7 years ago

James that is an incorrect statement.
using services in the UAE and buying goods are all subject to taxation. Municipality fees, import tax, government fees etc.
While it is true there is no income tax, there is no free school education, unemployment etc etc.
I think the average cost per child in the UK for education is about gbp 5000
So for a family with two children they get 10,000 free (sic)education.
Average income is just over 30,000. So the average person in the UK gets more out of the sytem than they pay in tax.
average rent 3 bed is gbp 16k
average rent 3 bed Dubai gbp
the average rent 3 bed 30k
facit. despite a tax free enviroment, it is often cheaper for an average family of 4 to live in the UK.

As such James your argument does not hold upto scrutiny