Salaries in the UAE are not keeping pace with the rising cost of living. This is what a recent Bayt.com survey has unveiled. The survey entitled The Bayt.com Middle East and North Africa Salary Survey 2013, May 2013, shows that this is a general trend across the Middle East and North Africa region that companies must begin to address if they wish to keep their employees loyal, happy, and satisfied. For now, half of UAE professionals state medium satisfaction with their current salary, with only 3% claiming high satisfaction.
More than half (53%) of UAE respondents in the Bayt.com Middle East and North Africa Salary Survey 2013 said cost of living had increased by more than 15% in 2012, with rent (80%), food (69%), and education costs (38%) being the biggest drivers. Eight out of 10 (78%) believe that the cost of living will continue to rise in 2013. Some 67% said they felt underpaid when compared with industry peers. The survey also revealed that 44% did not get a raise last year. The majority received a raise between 1% and 5%, and almost half (48%) were unhappy with the amount received. UAE respondent expectations for the next year were mixed, with about 30% expecting a raise of up to 15%, about 20% expecting more than 15%, while about another 30% do not believe they will get any raise in 2013. 60% of respondents are planning to find new jobs in the UAE, the highest result for all countries surveyed, and above the average of 54%.
When asked whether salaries in the UAE are increasing or decreasing in their country of residence, 63% of UAE respondents said that salaries in the UAE are increasing, while 19% stating that they are staying the same. Factors causing salaries in the UAE to increase are considered to be inflation and the rising cost of living (54%), growth in opportunities and economic growth (39%), and good corporate performance (17%). Reasons for salaries in the UAE not increasing are seen to be the poor economy (29%), poor corporate performance and profitability (23%), and more top talent than available jobs (23%).
The Bayt.com Top Industries in the MENA report, December 2012, revealed that the Oil, Gas and Petrochemicals industry is a regional leader in terms of satisfaction, employee experience, and the perception of professionals employed in other industries. The industry came out top in salary packages (48%), work-life balance (28%), career growth opportunities (34%) and job security and stability (34%). Banking and Finance came in second in the first three categories. The Hospitality industry also ranked high, coming first in work-life balance and career growth opportunities. Levels of satisfaction play a major role in employees deciding to change industry. Of those who participated in the survey, a quarter changed from one industry to another in the last 24 months. In descending order, the top reasons for doing so are better salaries, better growth opportunities, and a lack of recognition in their previous industry.
According to respondents, the UAE ranks fifth in the Middle East and North Africa region in terms of company growth in the last six months, with 36% stating there are now more employees than before. Four in ten respondents (44%) believe their company will hire in the next six months. Regarding future plans, 60% of respondents in the UAE will be looking for a better job in the same industry, while 40% will be looking for better jobs in different industries, especially those perceived to offer better incentives.
Professionals believe that the factors causing salaries in the UAE not to increase are: - More top talent than top jobs in the local recruitment market today (31%) - A poor economy (29%) - A poor corporate performance / profitability (23%)
Drivers of loyalty in particular are areas that employers in the Middle East and North Africa region should consider, in order to slow what would seem to be a very transient workforce. Employees across the MENA region seem overall dissatisfied with their current packages and the rising cost of living; if the two do not draw closer, then there could be potential economic difficulties in the coming years. Most respondents in the UAE claimed salary was their biggest draw card, with almost half saying the extent their loyalty was linked to salary was between 70 to 100%, followed by career progression opportunities (35%), line managers (32%), and coworkers and the environment they work in (32%).
In terms of overall quality of life, 44% in the UAE (among the highest in the region) feel their quality of life is better off in comparison to other people of a similar generation in their country of residence.
UAE respondents believe that they enjoy a standard of life that is mostly either on par with or above the standard of other residents in the same generation; 39% state that their standard of living is ‘about average’, 27% claim to be ‘somewhat better off’, and 17% are ‘much better off’. In fact, The Bayt.com Consumer Confidence Index Survey, March 2013, revealed that respondents in the UAE are the most positive in the region in respect to their opinion of the country’s current economic situation, with 44% stating that it has improved in the last six months, and 43% claiming that business conditions now are either ‘good’ or ‘very good’. The outlook for the UAE’s future is also bright; 64% believe that the economic situation will continue to improve; 71% anticipate better business conditions; and 46% think there will be more jobs available.
Companies in the UAE must move to meet the wage expectations of their employees or risk workers heading for the exit. Higher salaries and an increased cost of living are very closely tied and form a vicious cycle where either one can easily lead to the other. With 47% of MENA professionals linking 70 to 100% of their loyalty to their salary, companies should be able to offer more competitive packages to attract and retain top talent. If the performance of the company does not allow offering more monetary benefits, companies might want to focus on other non-monetary benefits.
Professionals in the UAE seem to find performance based incentives (62%) most attractive, followed by professional training and development courses (41%), commission for business or revenue generated (25%), and holiday allowances and foreign trips (25%). Companies in the UAE should take the above mentioned incentives into consideration, and go and search for the level of salaries that are paid within the same industry for the same job for people with the same experience, and structure their pay accordingly. Companies can use Bayt.com Salaries; the only pan-regional, pan-industrial salary benchmarking took in the MENA region today that provides local and regional salary information for a particular role or industry. All in all, we can say that the UAE will always remain an attractive destination for workers from around the world looking for jobs in the UAE. In fact, the Bayt.com Top Cities of the Middle East and North Africa poll, July 2012, shows that the top three cities in the Arab world to live in are, in order: Abu Dhabi, Dubai, and Sharjah. The Bayt.com MENA Salary Survey 2013 is an annual study that reveals the levels of satisfaction and factors effecting as much across the Middle East and North Africa region. This information is vital for employers and job seekers in the region; it helps them measure individual country situations and make informed, empowered career and life decisions. You can download the full report here. (Photo credit: Beshef on Flickr)
