GNcareers, from Gulf News

Don't expect much by way of 2016 salary hikes

Don't expect much by way of 2016 salary hikesImage Credit: Supplied

Don't expect a sharp increase in your take home pay - chances are that you will end up being disappointed.

The consultancy Mercer has come out with its '2015 Total Remuneration Survey Results', which suggests that whatever salary increases the UAE and Qatar will record might be limited to around 4.9 per cent. This is the first time the figure has dropped below 5 per cent in the last five years.

As for Saudi Arabia, the forecasts are for increases of 5 per cent - 'much lower than the traditional 6 per cent seen in the last few years,' according to Mercer.

''This fall in petro-dollar income has led to cuts in government spending observed in the last three to six months, which is compounding the situation,'' said Nuno Gomes, Principal - Information Solutions Business Leader at Mercer M. E. ''Added to this are underperforming financial markets and regional conflicts, with the overall picture one that is subduing companies' confidence and curtailing investment.''

It could be the same when it comes to changing jobs too. Only 57 per cent of Gulf based organisations surveyed Mercer had plans to increase their employee numbers in the year gone by as against the 71 per cent which said 'yes' in 2014. In Saudi Arabia, the decline in positivity was from 79 per cent to 66 per cent.

''It is clear that 2016 is likely to be characterised as being a year of restrictions, caution and a focus on improved efficiency from an HR (human resources), compensation and benefits perspective,'' said Gomes. ''Companies are looking to introduce new and interesting approaches to rewards, and benefit from the macro-economic environment to make necessary or desirable changes.''

Employers may also use the present circumstances to change traditional compensation policies, 'with the most common approach being the consolidating of guaranteed allowances. This reflects the increasing pull of the region as a career or life choice, with a concomitant higher value placed by expatriates on monthly pay, irrespective of its form.'

''One clear trend was an increase in the consolidation of allowances, which we recorded as being at 19 per cent, with predominantly housing and transportation being bundled,'' said Gomes. 'The prevalence was 13 per cent last year and 9 per cent in 2012.

''This doubling of the practice in just three years is something we attribute to the modern generation of expatriates seeking similar remuneration structures to those found in their countries of origin.''

The Mercer surveys cover all forms of cash and non-cash compensation elements, for over 1,000 benchmark jobs. More than 1,600 organisations representing almost 250,000 employees were surveyed, from top executives to the administrative level.

''There is no doubt that 2015 has seen one of the biggest shifts in economic momentum in the Middle East in recent years,'' said Gomes. ''The rapid decline in oil revenue, which has resulted from oil prices falling from over $100 to less than $50 a barrel, is having a significant impact on the growth plans for businesses in the region.''

* The Mercer survey found that 10 per cent of companies in the UAE have a pension scheme in the form of a savings plan, which is a key differentiating factor for organisations seeking positive attraction and retention outcomes.

* Also, 51 per cent of organisations say they offer flexible working hours to employees, against the 49 per cent in 2014. ''When we look at flexible working, these are policies that always land well with employees in the UAE, as they cater for the diverse workforce found in the country,'' said Nuno Gomes, Principal - Information Solutions Business Leader at Mercer M. E.

Are you in an endless wait for a perfect job in UAE

Source: Manoj Nair, Associate Editor,