A recent study conducted by Adecco, a global HR solutions firm, revealed that 60% of UAE employers kept their staff’s salaries and bonuses unchanged in the first half of 2024. Instead of raising base salaries, many companies focused on providing allowances to retain talent. The survey also found that 24% of employers have turned to alternative compensation strategies to attract and retain top talent, including housing bonuses, annual bonuses, and other allowances.
According to Mayank Patel, SVP at Adecco, the dynamics of the talent market play a crucial role in shaping salary-related decisions among employers. In high-demand industries like information technology, companies are more likely to offer generous salary packages and allowances to secure and retain key employees. Factors like inflation, fluctuating consumer spending, and cost optimization through automation and digital transformation have contributed to a conservative approach to salary increases in certain industries.
The study revealed that industries such as information technology, retail, banking, and financial services observed slower salary growth in the first half of 2024. Additionally, approximately 67% of UAE employees were seeking an immediate job switch, indicating a surge in job mobility due to factors like limited career progression, uncompetitive pay, rising cost of living, poor work-life balance, inadequate benefits, and lack of work flexibility. While salary remains a significant motivator, other factors like work-life balance, career prospects, company culture, and job security are also crucial for candidates.
After the Covid-19 pandemic, the UAE saw a significant increase in population and job opportunities across various sectors. Adecco noted that industries experiencing an oversupply of talent may not feel pressure to increase salaries, as there is a steady stream of candidates available. On the other hand, companies in high-demand skills or niche industries might offer bonuses and allowances to retain key employees. This delicate balance between supply and demand has highlighted the importance of a strategic approach to compensation tailored to the unique needs of each industry.
Overall, the study underscores the importance of understanding the shifting dynamics of the talent market and implementing innovative compensation strategies to attract and retain top talent. Employers in the UAE are navigating a complex global economy and are likely to continue leveraging bonuses, allowances, and benefits as key tools in recruitment and retention efforts. Stay informed about the latest news and trends in the job market by following reliable sources like Adecco to make well-informed decisions regarding compensation and talent management strategies.
