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Businesses in the UAE are expected to pay out bonuses of up to half a year’s gross salary next year as operating conditions improved on the back of positive economic activity from resumption in travel and Expo 2020 Dubai, according to a report by HR advisory firm Cooper Fitch.
About seven in ten (74 percent) of over 600 business leaders polled said they were planning bonus schemes for 2022, with the majority (46 percent) looking to pay 1 to 2 months’ gross salary and 21 percent planning on paying 3 to 5 months’ gross salary. About 7 percent confirmed plans to release bonuses equivalent to six months’ gross pay, while 26 percent said there won’t be any bonuses in the coming year.
“2022 looks to be a return to near full bonus pay out with exceptions for struggling organisations,” Cooper Fitch said.
Operating conditions in the non-oil sector continued to improve in November, with the UAE’s IHS Markit Purchasing Managers’ Index climbing to its highest level in almost two-and-a-half years. “The UAE economy [is] still running strong, with the rate of growth even accelerating from October when the start of Expo 2020 led to an upsurge in activity,” said David Owen, economist at IHS Markit.
In its report, Cooper Fitch said 2022 will be a year of continued growth for the UAE. “The UAE is resilient, and we have witnessed the market bounce back considerably this year after the challenges we faced in 2020,” the recruitment specialist said.
“The Expo will continue into the first quarter of 2022 and the kick-off of the Fifa World Cup in Qatar is more than likely going to contribute to significant growth across multiple markets due to Dubai being a major tourism transit and business hub.”
Salary increase
Employees in the UAE are also in line for a 3 percent raise in their incomes next year, with the majority of businesses (43 percent) saying they will be increasing salaries. Among those who have budgets for salary increases, 35 percent plan on increasing staff's pay by up to 5 percent, while 4 percent will make increases of 6 to 9 percent, and a further 5 percent will make pay adjustments of 10 percent or more.
However, 19 percent of companies said they will be cutting salaries in 2022 by up to 10 percent. Cooper Fitch’s report is based on the responses of UAE-based business leaders responsible for key decision making in their organisation.
The respondents were asked about the recovery from the COVID-19 pandemic, recruitment activity, salary and bonus payments for 2021 and 2022.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
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