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A shortage of job seekers and skilled labor in the market has led to an increase in staff requirements compared to a year ago
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Workers in the UAE are expected to see double-digit salary growth in 2023 as the labor market faces a shortage of suitable candidates.
With a shortage of skilled workers in the market, HR and recruiting industry executives say passive workers (who are already employed) will be in demand almost twice as much in late 2022 as they were early last year.
Raghib Salim, general manager of Nadia Global, said that due to the shortage of job seekers in the market, the salaries of new hires started to rise from 20% below the market level last year to match the current market level.
“Passive job seekers who had been seeking a 10-15% raise in early 2022 are gradually starting to ask for a 25-30% raise, while most employers consider 15-20% the norm to attract working professionals,” said Saleem.
Nadia Global expects salaries to increase by 10% in 2023, compared to 5% last year.
“We are now facing a situation where a growing number of vacancies and a shortage of suitable candidates, combined with changing employee expectations about life balance and salary increases, could see us face double-digit growth rates for the first time since 2008. salary,” said Ian Giulianotti, executive director of Nadia Global.
A survey by job portals Bayt and YouGov found that 53% of workers in the UAE want a pay rise by 2023.
Meanwhile, 57% of UAE respondents claimed that their current salary package included base salary and benefits, and 26% claimed it included only base salary. About 30 percent of workers said their companies paid overtime.
Personal health insurance, annual air tickets and tips were found to be the top perks offered to UAE employees.
Will the double-digit raises last?
“Employers need to think about compensation as an integral part of employee rewards and monitor the main factors driving salary expectations,” said Ola Haddad, director of human resources at Bayt.com.
Zafar Shah, research director at YouGov, said that while financial rewards are key to attracting talent into an organisation, non-financial rewards can be an essential differentiator when it comes to retaining talent.
Ian Giulianotti of Nadia Global advises that employers and employees alike need to find a medium that allows the business to grow profitably, to allow employees to be paid fairly and to keep them from looking for alternative work.
He reminded employers that if the era of double-digit pay rises arrives, then they will have to find other ways to reward and recognize employees.
“Rent and petrol prices are becoming the main drivers of inflation in the UAE. Housing and transport allowances need to be regularly and reasonably reviewed by employers,” he said.
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