Related – UAE salary guide 2021: How much should you be earning?
Employers in the UAE plan to give their staff an average annual pay rise of 4 per cent next year as the labour market improves following pandemic-induced job redundancies and salary cuts, according to new research.
This compares with a 3 per cent salary increase offered, on average, to employees in the UAE this year, the survey by global adviser Willis Towers Watson found.
The company polled 316 companies in the UAE in June about salary budgets and recruitment.
The share of UAE businesses expected to freeze salaries is estimated to fall from 15 per cent this year to 0.6 per cent next year, the survey found.
“Pay budgets have not yet returned to pre-pandemic levels, but employers are showing clear signs of growing optimism and they are reflecting that in their plans for higher pay rises,” Laurent Leclère, senior reward leader for the Middle East at Willis Towers Watson, said.
“In recent months, our conversations with human resource leaders and clients have revealed a more upbeat sense of recovery and growth. These are positive signals in a labour market that has come under heavy stress during the global pandemic.”
The global jobs market, which was badly affected during the pandemic, is showing signs of recovery as economies reopen. Job listings in the UAE have also increased following an economic rebound and as Dubai gears up to host Expo 2020.
A separate report released by recruitment agency Cooper Fitch last year found a majority of companies in the UAE were unlikely to give their employees a pay rise in 2021.
The Cooper Fitch UAE Salary Guide 2021, which polled 200 firms in the UAE, found 45 per cent of companies had not yet decided whether to implement pay rises for staff in 2021.
Average salary increases next year are projected to be higher in the medical technology sector with a 4.4 per cent hike expected, followed by pharmaceuticals and manufacturing with 4.3 per cent each, according to Willis Towers Watson research.
Employees in insurance could expect a 3.2 per cent salary increase in 2022, followed by business consulting with a 3.2 per cent rise, and energy and natural resources at 3.3 per cent, the survey found.
Meanwhile, UAE businesses tried to retain their top performers this year by giving them a pay rise that was 2.7 times greater than for employees on average performance ratings, the survey revealed.
More than half of UAE companies polled said their business outlook is “ahead” or “well ahead” of where they thought it would be, while only 3 per cent said it was below expectations.
About 26 per cent of UAE employers plan to recruit more staff next year, while 64 per cent said they would maintain their current number of employees and 10 per cent expect to cut headcounts, according to the Willis Towers Watson data.
More than half of employers who are recruiting in the UAE said they are trying to fill roles in sales, while 43 per cent are seeking employees for technical skilled trades, 30 per cent are looking to fill engineering positions and 27 per cent are actively hiring in the information technology sector.
The least active recruitment areas are in human resources (3 per cent), finance (4 per cent) and marketing (20 per cent), the survey found.
Demand for software engineers, physicians, network administrators, business operations managers and biomedical engineers is likely to increase in the future, according to a survey conducted by jobs site Bayt.com and market research agency YouGov.
Other roles that will be in demand include systems administrators, designers, data analysts, chemical engineers, nurses and electrical engineers, according to the Bayt.com survey.
“It’s significant that, across many different industry sectors, there has been a real focus on attracting and retaining digital roles,” Mr Leclère said.
“This is largely driven by changes in consumer behaviour since the pandemic started. Digital roles will keep commanding enhanced pay packages as we expect trends that started during Covid to continue or even accelerate.”
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OPINIONS ON PALESTINE & ISRAEL
Another way to earn air miles
In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.
An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.
“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
WISH
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