UAE salaries forecast to rise by 6.3% in 2011

Private sector salaries are forecast to increase at an average rate of 6.3 per cent in the UAE compared to 6.6 per cent for the whole of GCC this year.

The research, based on a survey of 32,000 professionals and 1,400 companies across the six Gulf states, was released by GulfTalent.com.

According to the forecast, salaries in Qatar will show an increase of 7.2 per cent, followed by Saudi Arabia and Oman at 7 per cent.

Salaries in the UAE will go up by 6.3 per cent this year, while in Kuwait it will rise by 5.9 per cent and in Bahrain by 5.1 per cent, the study said.

In 2010, Qatar and Saudi Arabia had the highest pay rises in 2010 at 6.8 per cent and 6.7 per cent, respectively. Oman was in third place with 6.4 per cent, followed by Kuwait at 5.7 per cent. The UAE and Bahrain saw the smallest increases at 5.2 per cent and 4.9 per cent, respectively. Although much lower than the double-digit increases of 2008, the pay rises were all higher than the rates of inflation, resulting in improving living standards for many, it said.

However, an estimated 55 per cent of professionals did not receive any pay increase at all.

Across the region, with consumer spending picking up, the retail sector saw the highest pay rise at 6.4 per cent, while education had the smallest increase at 3.8 per cent. Among job categories, human resource professionals saw the highest raise at 7.1 per cent.

Pay increases were largely driven by the employers' efforts to retain their top performers, growing demand for skill in Qatar and Saudi Arabia, as well as continued growth in Asia, the main source of talent for the Gulf, the study said.

"With increasingly attractive career opportunities in their home countries, Asian professionals working in the Gulf received pay rises of 6.1 per cent compared with just 3.2 per cent for Western professionals," it said.

Salaries in the booming Indian economy grew at 11.1 per cent in 2010, compared with just 2.4 per cent in the UK, where unemployment remains high following the financial crisis.

Based on the report findings, the Gulf's labour market is witnessing "a small but fast-rising Chinese presence" - as employers seek substitutes for India and the Philippines, their traditional sources of skill, while a growing number of Chinese companies win major construction and energy contracts in the region, often bringing the required staff directly from China. Construction of a high-speed railway connecting Mecca and Medina, and a new port in Doha are among contracts recently awarded to Chinese firms.

The study said the employment market in the Gulf was expected to continue growing at a moderate pace, aided by global economic recovery, rising oil prices and continued government spending on infrastructure projects. Almost 61 per cent of companies surveyed expected to increase headcount in 2011, compared to nine per cent who planned staff cuts.

8 February 2011

By : Issac John, Khaleej Times