UAE salaries and hiring to increase in 2022, Mercer says

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 on Tuesday.

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 measures to support businesses.

Business activity in the non-oil private sectors of the Arab world’s second-biggest economy continued to improve in October, boosted by the easing of Covid-19 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 during the month, 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 marketwide salary growth and benefits,” Mr El Zein said.

“Optimism is strong when looking at 2022, with many UAE companies forecasting a higher wage increase in order 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.

However, industries expected to outpace growth include life sciences and consumer goods, at 4 per cent, as a result of the “robust performance of the sectors during the pandemic”, Mercer said.

“This year’s Total Remuneration Survey shows positive sentiment towards hiring trends and salary increases, although not quite at pre-pandemic levels,” said Ted Raffoul, career products leader for the Mena region at Mercer.

“Companies must focus on continuing to provide flexible working models to employees in order maintain a strong proposition as an employer.”

However, the increased competition for employees with in-demand skills has forced employers to readdress their compensation and benefits strategies to attract and retain staff, the survey said.

“Companies are increasing their focus on long-term incentive plans, particularly for executives and those with experience in specialised fields. A key benefit that employees are seeking is that of flexible working, which has been in demand globally,” it said.

On Monday, a survey by professional network service LinkedIn found that remote job postings have more than doubled in the UAE as companies adapt to changing preferences in the workforce caused by the pandemic.

The biggest concern for business leaders is that employees working from home may feel it is harder to climb the career ladder, the LinkedIn survey found.