According to a Mercer report, employers in the UAE will go on a hiring spree in 2022 and raise salaries by an average of 3.6% as job demand picks up amid the UAE’s post-coronavirus economic recovery.
Attracting and retaining employees will also necessitate a greater emphasis on flexible working policies such as hybrid or remote working, according to Mercer’s 2021 Total Remuneration Survey released on Tuesday.
Mercer polled 599 UAE companies from various industries such as manufacturing, retail and wholesale, technology, chemicals, consumer goods, life sciences, and energy.
“Signs of growth abound, as evidenced by increased hiring activity in 2021 and a positive forecast for 2022,” said Andrew El Zein, Mercer’s career department associate for the Mena region.
“Employers prioritize hiring for in-demand skill sets that will support future business growth.” However, the talent pool is still growing, resulting in a talent war.”
Since the start of the Covid-19 pandemic in March of last year, the UAE has spent billions of dirhams on economic stimulus measures to help businesses.
Business activity in the Arab world’s second-largest economy’s non-oil private sectors continued to improve in October, boosted by the relaxation of Covid-19 restrictions, an increase in tourism, and increased spending amid the economic recovery.
The UAE’s headline PMI rose to 55.7 in October from 53.3 in September, underpinning a significant increase in new business during the month, driven by rising spending in the run-up to the opening of Expo 2020 Dubai.
A reading above 50 indicates that the economy is expanding, while anything below indicates that it is contracting.
The results of the Mercer survey indicate an overall salary increase of 3.6 percent in 2022, which is slightly lower than the figures for 2019 and 2020, which are 4.5 percent and 3.8 percent, respectively.
However, according to the Mercer study, 14% of companies frozen salaries in 2020, dropping to 10% in 2021. According to Mercer, only 5% of companies in the UAE will freeze salaries in 2022.
“To attract and retain top talent, employers must strive to keep up with market-wide salary and benefit growth,” El Zein said.
“When looking ahead to 2022, optimism is high, with many UAE companies forecasting higher wage increases in order to attract and retain top talent, particularly in competitive fields.”
According to the survey, the technology and energy sectors are slightly behind in terms of salary increases, with 3.5% and 3.4%, respectively.
Life sciences and consumer goods, however, are expected to outpace growth at 4% as a result of the “robust performance of the sectors during the pandemic,” according to Mercer.
“This year’s Total Remuneration Survey shows positive sentiment toward hiring trends and salary increases, though not quite at pre-pandemic levels,” said Ted Raffoul, Mercer’s Mena region career products leader.
“In order to maintain a strong proposition as an employer, companies must focus on continuing to provide flexible working models to employees.”
According to the survey, increased competition for employees with in-demand skills has forced employers to rethink their compensation and benefits strategies in order to attract and retain employees.
“Companies are increasing their emphasis on long-term incentive plans, particularly for executives and those with specialized experience.” “A key benefit that employees seek is flexible working, which is in high demand globally,” it said.
According to a survey conducted by professional network service LinkedIn on Monday, remote job postings in the UAE have more than doubled as companies adapt to changing workforce preferences caused by the pandemic.
According to the LinkedIn survey, the biggest concern for business leaders is that employees who work from home may believe it is more difficult to advance in their careers.