What is the UAE salary outlook for 2021?

Sectors including pharmaceuticals, utilities, technology, finance and government will offer the biggest wage increases next year

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Salaries in the UAE will remain stable in 2021 and are expected to withstand the economic challenges caused by the Covid-19 pandemic, according to a new report.

However, resilient sectors such as technology, pharmaceuticals, finance, government and human resources will offer the biggest wage increases, bonuses and benefits to employees in an effort to retain top talent, according to the 2021 Salary Guide from global recruitment consultancy Robert Half.

While retaining talent is a major concern for nearly 90 per cent of employers in the UAE, 73 per cent of companies are offering annual remuneration packages that meet or exceed pre-pandemic numbers, it added.

"It's been a tough second and third quarter but we are starting to see green shoots in some sectors," Gareth El Mettouri, associate director at Dubai-based Robert Half Middle East, told The National.

“Certain sectors have been hit more than others, such as tourism, hospitality and retail, but there is definitely more competition for top talent … that is driving salaries.”

According to the Robert Half report, 47 per cent of senior managers said salaries remained steady since Covid-19 movement restrictions were introduced in March, which forced many companies to deploy remote and flexible working measures.

It also found that 26 per cent of respondents said there had been an increase in base compensation for key roles spanning accounting and finance, financial services, technology, human resources and administration roles.

In October, a study by global human resources consulting company Mercer found that salaries in the UAE increased by an average of 3.8 per cent this year. While 10 per cent of UAE companies reduced salaries temporarily this year due to the pandemic, the overall market still experienced positive salary inflation, the Mercer Total Remuneration Survey said.

It added that salaries for workers in the UAE’s life sciences sector (pharmaceuticals and health care) registered the highest increase, rising 4.5 per cent. This was followed by a 3.5 per cent increase for workers in consumer goods, 3 per cent for high-tech employees and 2.6 per cent in the energy industry.

Meanwhile, the Robert Half report found that some companies were still paying bonuses of up to 25 per cent this year. Fifty-two per cent of managers said they are making bonus payments that either meet or exceed their pre-Covid-19 equivalents. However, 38 per cent said they are offering lower bonuses compared with the previous year.

Certain sectors have been hit more than others, such as tourism, hospitality and retail, but there is definitely more competition for top talent … and that is driving salaries and other benefits

“Bonuses are being paid, but I would say they are all lower compared to last year,” Mr El Mettouri said. “Company performance isn't what it was last year, but those that haven't been hit as hard or actually excelled during this time are paying bonuses at the 25 per cent level and above in some cases.

“For individuals that performed this year, they will be expecting bonuses or an increase in salary. [But] if employers aren't paying, then those candidates obviously are at risk of moving into the open market and looking for new opportunities.”

According to the report, the pandemic is also changing the employee benefits landscape, with remote and flexible working options, childcare subsidies and training support now being offered as part of remuneration packages.

Mr El Mettouri said employers are willing to be more flexible to retain top talent and are more aware of the importance of a work-life balance and health and well-being, but it remains to be seen if Covid-19 has permanently changed these types of benefits for employees.

“I think it’s still too early to tell,” he said. “But ... employers are more open to candidates working remotely and having more flexibility because the jobs are still being done.”

Technologically savvy employees remain the most in demand for employers, but they are also looking for soft skills that include adaptability, resilience, communication, leadership and empathy.

“Today’s workplace isn’t the same as it was 12 months ago. Demand has risen for digital experts as companies undergo rapid digital transformation to remodel and implement processes which will set them in good stead for the fast pace of innovation,” the Robert Half report said.

“Expedited digitisation has also given rise to a number of other skill requirements, such as resilience and adaptability. Remote working has placed even greater emphasis on the need for elevated communication skills as interactions move into the digital world.”

Mr El Mettouri added that adaptability and productivity are two of the most important skills for the workplace of the future as the business climate will remain challenging and remote working will continue for the foreseeable future.

He also advised jobseekers to tailor their CVs to the current climate, such as including key achievements on cost-saving exercises, and highlighting technical and software skills.

“Tech is a key focus for many companies at the moment,” Mr El Mettouri said. “Ensure your LinkedIn profile is up to date and continue learning and upskilling. Our clients are requesting tech-savvy candidates who can hit the ground running from day one.”