UAE salaries to rise by 4% in 2021; hiring up in some sectors despite COVID-19

Workers in life sciences likely to receive biggest pay hike, Mercer's latest report shows

Image used for illustrative purpose. United Arab Emirates dirham.

Image used for illustrative purpose. United Arab Emirates dirham.

Getty Images

UAE salaries will increase next year despite the financial fallout from the coronavirus pandemic, according to the latest report by human resources experts Mercer published on Monday.

Across all industries, wages are forecast to go up by 4 percent, with workers in the life sciences sector likely to see the biggest increase of 4.5 percent, followed by those in high-technology at 4 percent and consumer goods at 3.8 percent. Employees in the energy industry will have the lowest income adjustment, estimated to be around 1.9 percent.

The 2020 UAE Total Remuneration Survey (TRS) by Mercer, which polled more than 500 companies across all industries in the UAE, also revealed that salaries of workers in the country increased by 3.8 percent this year, while 19.4 percent of the firms opted to froze salaries.

Some firms have also increased their headcount, while others have expressed plans to hire new employees in 2021.

“Even though we expect uncertainty to span into 2021, [the survey] results promise a more optimistic new year as companies are increasingly reporting positive hiring sentiments compared to those indicated at the onset of the COVID-19 pandemic,” Carolina Vorster, workforce products leader for Middle East and North Africa (Mena) at Mercer, said.

More hiring

The businesses that have increased their headcount this year, Mercer said, are those in the logistics sector, specifically for express and last-mile delivery. The stay-at-home trend throughout the pandemic has fuelled strong demand in the e-commerce sector.

Companies around the world have been experiencing challenges due to the economic slowdown caused by the health outbreak. Massive job losses and business closures have been reported in many markets across the globe.

In the UAE, some analysts had earlier predicted hundreds of thousands of job cuts that could lead to a massive expat exodus. 

However, Mercer’s findings showed that the impact of the pandemic on take-home salaries and benefits of employees has been “less drastic than initially feared.”

Salary movements

Mercer’s study, however, found that 48.6 percent of the organisations surveyed had their 2020 salary increases affected by COVID-19, with 35 percent of them saying they had opted to delay pay hikes for about six months.

About 71 percent also said that salary increase levels granted this year were “different than originally planned”.

Other Gulf states

Outside the UAE, companies in Saudi Arabia and Kuwait also have plans to increase staff salaries by 4 percent next year.

Qatar-based firms are planning an average increase of 3.9 percent, while those in Bahrain and Oman are expected to grant 3 percent increase.

(Reporting by Cleofe Maceda, editing by Seban Scaria)

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© ZAWYA 2020

More From GCC