UAE salaries failing to keep pace with inflation
UAE salaries failing to keep pace with inflation
Pay for workers across the UAE is failing to keep up with the rising cost of living, new research has found.
A survey by consulting firm Mercer found that around 67% of companies have received requests from staff for pay rises, but only 16% of firms have responded by raising pay.
Inflation in the UAE is expected to peak at 5.6% this year.
According to the survey, nearly half of respondents are not planning to change employees’ remuneration in 2022, while 37% are considering a slight adjustment this year.
“Employers are being cautious about immediately bumping up wages to match inflation, and many are considering short-term actions with less permanent implications,” said Andrew El Zein, a consultant at the MENA unit of Mercer.
Surging inflation is also the major cause of the global phenomenon employment experts are calling the ‘Great Resignation’, where employees are leaving their jobs, and in many cases leaving the workforce entirely.
While across the world falling real incomes are the main reason for people quitting their jobs, in the UAE salary seems to be a minor factor. A survey by Bayt.com and YouGov showed that more than seven in 10 individuals in the emirates are considering resigning, but only 18% cited pay as the primary reason.
Despite this, the Mercer study found that companies are “budgeting for highest (pay) rises next year”, El Zein said.
Companies also said they planned to implement 5% increases in salaries in 2023, the survey showed – higher than the average pay rise in recent years of around 3% to 4%.
El Zein added that increasing pay packets “requires a structured approach that balances employee concerns with managing a challenging and unpredictable fiscal environment”.
Support for women in business
The Abu Dhabi Chamber of Commerce and Industry has created a new board for the Abu Dhabi Businesswomen Council (ADBWC).
The move is part of the chamber of commerce’s efforts to support businesswomen and women entrepreneurs in the emirate, in order to help them increase their contribution to the capital city’s economy.
The Chamber of Commerce said: “The new board will have a mandate to help women entrepreneurs refine their skills; introduce them to the applicable laws and policies; and help them learn how to benefit from the local and federal governmental initiatives and incentives to name a few.”
The ADBWC said it will adopt a “new strategy” going forward, in order to empower and increase women’s pioneering role in Abu Dhabi business sector, according to chairwoman Asma Al Fahim.
She added: “Over the past 50 years, the UAE has placed women empowerment amongst its top priorities and supported the Emirati woman to be a key partner in building the UAE.”
Al Fahim said ADBWC will increase its communication with businesswomen in Abu Dhabi, to keep them updated on the latest economic changes.
The council will also launch new initiatives and programmes “to support the business environment and to equip women entrepreneurs with all the necessary tools that allows them to benefit from all business opportunities in the local, regional and international markets,” she said.
She added that the board’s mandate is also to help women refine their skills and introduce them to applicable laws and policies. It will also aim to help businesswomen learn how to benefit from local and federal government initiatives and incentives.
“Over the past 50 years, the UAE has placed women empowerment among its top priorities and supported the Emirati woman to be a key partner in building the UAE,” Al Fahim said.
Listed companies in the UAE have more than doubled the number of women on their board of directors since 2020, as part of the emirates’ efforts to improve gender diversity among corporations.
Women held 77 seats in the boardrooms of listed companies in 2022, up from 29 seats in 2020, according to a study by Aurora50, a social enterprise working towards gender equality in boardrooms, and the Mohammed bin Rashid School of Government.
