A new report says average salaries increased by 5.3 per cent for professionals across the UAE last year, with increases of 5.9 per cent projected for 2014, driving an increase in the UAE’s popularity as a destination for expats.
The report, from the recruitment company Gulf Talent, says the UAE is the preferred workplace of 65 per cent of expats currently working in the Arabian Gulf – a level that has not been touched since 2008.
“Attracting western nationals remains easier for Gulf employers, due to high unemployment and wage stagnation in Europe,” the report stated.
Dubai is increasingly the most popular city for expats in the GCC, with 48 per cent of those outside the city wishing to relocate there – up from 40 per cent last year. It was followed by Abu Dhabi, where 20 per cent of the region’s expats would like to live.
Gulf Talent said it came to these conclusions after surveying 34,000 job candidates and 800 employers online, as well as interviewing 60 senior executives in the GCC states.
The report said the average private sector wage increase in the Gulf, 5.9 per cent, considerably outpaced salary rises in Australia, the UK, the US and Canada.
The UAE also had the highest retention rate of expatriates of any GCC country, with 88 per cent of expats in the country intending to stay there. Kuwait had an expected churn rate of 40 per cent, as only 60 per cent of expats intended to remain in the country.
In the GCC as a whole there were nominal average salary increases of 5.9 per cent last year, and expected increases of 6.3 per cent next year. Salary gains still lag behind pre-crisis levels, however. In 2007 and 2008 there were nominal increases of 9 per cent and 11.4 per cent respectively,
Real salaries, which factor in inflation, increased 4.2 per cent in the UAE. In the GCC, only Oman’s average salaries had a larger real increase of 6.1 per cent. For Saudi Arabia there were real increases of 3 per cent, while Bahraini real incomes increased 0.8 per cent.
Employment is growing, as 57 per cent of employers expect to increase headcount over the next 12 months in the UAE, with the hospitality and retail sectors expecting to add the largest number of employees. This indicates an increasing pace of job growth, as only 51 per cent of employers planned to raise headcount in last year.
Oil and gas companies have significantly reduced their expectations of employment growth. Last year, 57 per cent expected to expand their total number of employees, while only 25 per cent expect to do so in 2014 – suggesting an overall decrease in energy sector employment.
The report pointed to the risk of higher inflation in the run-up to Expo 2020 and the Qatar 2022 Fifa World Cup as factors that may reduce real salary growth over the longer term.
abouyamourn@thenational.ae
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