UAE: 67% of companies asked for pay rise by employees – News

Senior advisors say prudent employers choose to invest in less impactful short-term actions, such as one-time amounts or retention bonuses

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Some 67 percent of companies in the UAE say they have received requests from employees to increase wages and allowances to offset rising inflation, according to a new survey by Mercer — but many of them are boycotting employees.

The survey results show that only 16% of companies have taken some form of action, including one-time lump sum payments, off-cycle wage increases and housing subsidy increases, to retain talent. During the annual wage growth cycle in early 2022, these companies increased wages by an average of 4%.

However, 84% of businesses have yet to adjust employee compensation this year in response to higher-than-normal inflation.

“Employers are wary of raising wages immediately to combat inflation, and many are considering short-term actions with less permanent effects, such as lump sum payments or retention bonuses – or they are investing in improving their employees by offering improved jobs work experience – life balance, flexibility and training,” said Andrew El Zein, Senior Associate Career Advisor at Mercer Menor.

“Companies are budgeting for higher pay raises for next year, ultimately offsetting staff concerns about inflation and matching rising pay expectations. This requires a structured approach where staff concerns are challenging and manageable at a time when balance between an unpredictable fiscal environment,” he said.

5% salary increase next year

The UAE Central Bank expects inflation to reach 5.6% in 2022.

Although inflation in the GCC’s second-largest economy remains relatively low compared to the rest of the world, business activity in the UAE has been on the rise in 2022, leading to a greater need for businesses to attract and retain talent to ensure business productivity. out remains on track. Also, in a tight labor market, employees’ pay expectations are rising as they increasingly demand that companies take action to offset rising inflation.

As a result, the company plans to increase its budgeted annual salary by 5% in 2023, up from 3-4% in recent years.

The survey, which covered more than 200 global and local companies in the UAE across various industries, revealed that most businesses in the UAE are boycotting employee demands.

An estimated 47% of companies do not plan to take any action in 2022, while 37% are considering or planning some form of off-cycle adjustment to compensation in 2022, according to Mercer.

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