Dubai: The continued decline in oil prices, coupled with the market turbulence and regional conflicts that broke out during the first few days of 2016, made for grim reading.
According to analysts, the situation has had an impact on employers’ expansion plans, hence those who are looking forward to seeing a big boost in their payslips this year might just get disappointed.
However, it doesn’t mean companies are completely ruling out financial rewards. With the current slowdown, employers realise that it is critical to keep their top talent.
According to an analysis by Mercer, such mindful organisations include those in the consumer goods and other related industries, as they are most likely to grant an increase of 5 per cent in 2016.
Employers in the retail, trade and logistics business, as well as those in real estate and construction, have shared plans to distribute a 4.5 per cent salary adjustment, while those in the advertising, market research, public relations, media and entertainment could pass on a 4.2 per cent increase.
Organisations in the banking, financial services and insurance industries may grant a 3 per cent increase.
Although the oil and gas sector has been hardly hit by the decline in prices, some companies are still willing to reward their staff with a 1.8 per cent salary increase.
This year’s wage adjustments, however, will not be across-the-board, so not everyone in the mentioned industries can expect a pay raise this year.
Nuno Gomes, principal, information solutions business leader at Mercer Middle East, said companies will be more selective when it comes to granting financial rewards. Increases will be largely dependent on employee performance.
“What we’re hearing from our clients is around more differentiation and selective investments. To this extent, the employees more likely to receive higher increases are high performers (based on corporate performance management systems) and holders of business critical positions – not necessarily those in high-rank positions, but those who are vital to the business and bring value to the organisation,” Gomes told Gulf News.
Mercer’s salary increase projections were based on the data gathered on a quarterly basis from human resource (HR) managers and other HR professionals. The latest survey was conducted in November, with 138 respondents.
Other recruitment specialists forecast salary increases in the UAE to average 1.7 per cent this year.
Gareth El Mettouri, associate director at Robert Half UAE, said that despite the overall economic slowdown, salary increases can’t be ruled out completely this year, especially since top talent retention is a high focus for many organisations today.
In fact, the majority of HR directors (72 per cent) polled by Robert Half said they are concerned about losing their top performers to other opportunities.
“Despite uncertainty in the UAE, businesses are having to compete locally and internationally to attract and retain skilled professionals, especially for in-demand roles. As the region continues to operate in a specialists market, professionals with the right mix of expertise and soft-skills for a role will be highly sought-after,” El Mettouri told Gulf News.
“This reflects the need to pay competitively, the average starting salaries within the UAE region are expected to increase by a modest 1.7%.”
When considering wage adjustments, employers will pay more attention to employee performance rather than implement a flat rate across the organisation.
“Company performance and the economic climate will be primary factors for granting salary increases, but these are being assessed alongside businesses’ need to retain their skilled professionals,” El Mettouri said.
But employers are also keen to offer workers other benefits, such as career development opportunities and greater work-life balance through flexible working and additional annual leave, he added.