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UAE –Labour market competitive yet healthy

16 September 2013

The United Arab Emirates has a renewed buoyancy in the job market, a fairness of pay by gender, and a clustering of UAE nations in selected sectors, according to the annual UAE compensation and Benefits Report from global management consulting firm Hay Group.

The report contains an analysis of salary data from more than 600 organisations in the UAE covering more than 270,000 employees.

The author of the report, Harish Bhatia gave a summary of the headline trends at a conference in Dubai: "Across the market including all sectors and levels of seniority there has been a +4.4% increase in pay against inflation of +1.5%. The largest pay rises have been in within oil and gas sector multi-nationals, and global Fast Moving Consumer Goods (FMCG) companies that consider the UAE a prime market."

According to Hay Group, 75% of the UAE nationals in the private sector workforce are in the oil and gas and banking sectors, and state owned enterprises. This makes the market competitively difficult for other employers to attract and retain UAE nationals.

Mr Bhatia said: "The sectors in which nationals are clustered pay around +20% higher than the rest of the private sector aggregate. With a small pool of nationals focused on the private sector, the demand is fierce and employers in other industries find themselves competing with higher paying private sectors, as well as the public sector, for national talent."

For the first time in the 15 years that the report has been published, Hay Group has collected data on gender in response to client demand. 

Mr. Bhatia commented, "UAE employers have submitted data on gender for the first time and we have found very little difference between the pay of men and women doing the same job. The difference is around, or less than in some cases, 1%. Employers that participated in the report generally do not discriminate by gender on pay."

However, overall 80% of the sample workforce is male and only 20% female. The gender balance is more even amongst nationals says Bhatia, "Although the proportion is growing, nationals still comprise a relatively small part of Hay Group's data. However, we can report that 55% are male and 45% are female with female representation being highest at supervisory levels where it is 28%. Jobs at this level include customer facing roles, administration and secretarial roles."

45,000 employees in Hay Group's study have joined their current employer in the last 12 months and were offered salaries -7% below the market average. 

Mr. Bhatia says this is a healthy sign for employers, "New joiners are paid below the market average because they are being recruited at the lower end of the scale, which is a common policy. It signifies that companies are able to hire candidates at the right asking rates in most sectors."

In 2014, salaries are forecast to grow at +5% on average, according to the Hay Group report, with the retail sector forecasting above average salary increases of +6%. He commented: "The retail sector has largely benefited from an increase in tourism and visitors to the UAE; the sector is doing well and is now playing catch-up having historically been low paying."

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