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Most companies in the UAE are expected to hand workers their bonuses for 2022, as business conditions improved and the local job market enjoyed its strongest year in a decade, according to a study by Cooper Fitch.
However, when it comes to salary increases, businesses are likely to be less generous in the coming year, despite expectations that the UAE will emerge as the fastest-growing economy in the Gulf region in 2023.
Almost 75% of business leaders polled by the recruitment consultancy said they have plans to distribute annual bonuses, with the biggest payouts likely to be equivalent to six months’ gross salary. The percentage of businesses planning bonuses, however, remains unchanged compared to the previous year’s data.
Most respondents that have bonus plans (36%) are likely to pay one month’s gross salary, while 20% intend to pay two months’ gross salary. A smaller proportion of employers (10%) are likely to pay bonuses equivalent to three months’ gross salary, while 3% said four months and 1% said five months.
The biggest payout will be equivalent to six months’ gross salary and this will be handed out by 4% of the companies polled by Cooper Fitch. The companies included in the survey operate in banking, financial services, investment management and consulting sectors.
Salary increases
As for monthly incomes, Cooper Fitch estimates that workers’ take-home pay will grow by just 2% next year, although the majority of companies (57%) plan to make adjustments. Some workers are also likely to see some pay cuts, with 20% of businesses saying they plan to decrease staff pay next year.
“While this figure (2% increase) is perhaps lower than may be expected given anticipated recruitment demand, this is what the survey data showed,” said Cooper Fitch Founder and CEO Trefor Murphy.
Approximately, 45% expect to grant a 0-5% increase, while 5% anticipate salary rises of 6-9% and 7% intend to boost wages by more than 10% during the coming 12 months.
Almost half of the companies (49%) in the UAE did deliver salary increases this year, with a small number (7%) reporting that they granted increases in excess of 10%.
The UAE economy has bounced back from the impact of the coronavirus pandemic. The International Monetary Fund (IMF) estimated that economic growth in the country will outpace those in other Gulf states. The growth has been underpinned by the government’s successful handling of the pandemic, rising international visitor traffic, as well as renewed business confidence and strong consumer spending.
“The [UAE] economy is growing rapidly thanks to the impressive recovery rates of the key segments that underpin it. Our team sees 2023 as a year in which this momentum will continue to build,” said Murphy.
He noted that the UAE’s job market this year has already recorded its strongest performance in a decade, “with higher-than-anticipated demand across the public and private sectors”.
“This activity has been fueled in no small part by the healthy position in which the nation’s government finds itself, as well as its success in incentivizing local and international funding for large projects.”
(Reporting by Cleofe Maceda; editing by Mily Chakrabarty)
