43% of businesses in the UAE will be increasing their employees’ salaries in the coming year, according to the Cooper Fitch UAE Salary Guide 2022.

Owing to a resurgence in the employment market and economy as a result of Expo 2020 Dubai, and the UAE government’s successful management of the coronavirus outbreak, the Middle Eastern nation is expected to see an average salary increase of 3% in 2022, says a survey by recruitment, executive search and HR advisory firm Cooper Fitch.

As per the Cooper Fitch UAE Salary Guide 2022, which surveyed 600 UAE organisations, the majority of businesses (43%) in the UAE will be increasing their employees’ salaries in the year 2022 with 35% of those increasing by 0-5%; 4% will make increases of 6-9%; and 5% said they will increase salaries by 10% or more.

When asked if they plan to revise their salaries in 2022, surprisingly 37% said they don’t plan to make any changes to the salaries of the employees next year.  Perhaps even more surprising was that 19 % of those surveyed said they will be decreasing salaries in 2022 by up to 10%.

Showing a significant improvement in the job market, the survey says 85% of organisations increased or made no changes to salaries in 2021. “From those surveyed this year 41% said they increased salaries in 2021 with advisory, HR, manufacturing, technology, strategy and public sectors amongst those who said they made an increase of up to 10 per cent,” it added.

“The UAE is resilient and we have witnessed the market bounce back considerably this year after the challenges we faced in 2020. We see 2022 as a year of continued growth. The Expo will continue into the first quarter of 2022 and the kick-off of the Fifa World Cup in Qatar is more than likely going to contribute to significant growth across multiple markets due to Dubai being a major tourism transit and business hub,” Khaleej Times quoted Trefor Murphy, founder and CEO of Cooper Fitch as saying.

Bonuses are back, but headcounts are dropping

2022 looks to see a return to near full bonus pay out with exceptions for struggling organisations.

On paying out bonus schemes, a staggering 74% of the respondents said they were going to pay out bonuses with 46% of those paying 1-2 months’ gross salary and 21% paying 3-5 months’ gross salary.   Only 26 per cent said they weren't going to pay out bonuses next year.

When asked if organisations had paid bonuses in 2021, 63% said they did pay out bonuses within their organisation showing a significant increase on the pay out of bonuses from 2020 with a 19% increase on last year (44%).

However, layoffs may be in the works for some companies.

Around 30% of organisations surveyed across the UAE said they made reductions to their headcount in 2021. Over half of those surveyed (52%) said they made increases to their headcount this year and 18% made no changes.

For 2022, 23% of organisations will be reducing their headcount, whereas 59% will be increasing their headcount by up to 10% or more. These results reflect the ever-changing skill requirements of the UAE, the survey says.

Many of the UAE’s traditionally strong sectors such as tourism, real estate, and aviation were hit hard during the pandemic. However,  the UAE saw a significant recovery with a strong response from the government which quickly and efficiently rolled out vaccination programmes which eased restrictions, allowed tourists to enter the country and the capital to open its border, which contributed to easier movement between the emirates for both residents and tourists.