UAE's skilled workers will see hefty salary increase
The supply of highly skilled workers is falling short of demand.
Businesses across the UAE need to plan ahead for the next few years as the shortage of highly skilled workers in the region will result in a substantial increase in salaries, experts predicted.
Speaking at a press conference on Wednesday, experts at Korn Ferry highlighted the results of 'The Salary Surge' report, which noted that several global economies, including the UAE, will have to pay more in salaries to attract and retain highly specialised talent. Unless certain actions are taken, organisations around the world could add more than $2.5 trillion to their annual cost of labour by 2030. Over $593 billion of this amount will be added by companies in the Europe, Middle East, and Africa (Emea) region alone.
"The supply of highly skilled workers right now is falling very much short of demand across major economies," explained Jonathan Holmes, MD of Korn Ferry Mena. "By 2030, it is estimated that the global supply of highly skilled labour will fall short of demand by 16 per cent."
Korn Ferry's study focused on the talent-supply gap in 20 developed and developing economies, and concluded that the potential salary surge is the direct result of a shortage of an estimated 85 million highly skilled workers required for companies to succeed in the new digital economy.
In the UAE, while overall wage increases are just keeping pace with inflation, salaries for in-demand workers could add as much as $5.9 billion to the total national payroll by 2030, a nine per cent increase. The 'TMT' sector faces the greatest challenges in the UAE, with a potential wage premium of $1.124 billion, followed by 'Financial and Business Services' at $612 million.
In addition, Vijay Gandhi, regional director for the Emea region at Korn Ferry Products, said that skilled workers will be put in a strong position to negotiate higher salaries, as the competition for talent heats up. "With existing highly skilled workers, leaders must focus on what really drives retention," he explained. "We know that employees who have the opportunity for career development, benefit from inspiring leadership and feel their work has purpose are more likely to stay at an organisation, and - crucially - will be more engaged and productive. Companies need to identify the talent of tomorrow and help them achieve their potential."
Holmes further noted that changing demographics at work also mean that there is a new generation of workers that are looking for a better rewards system. "We have to change the paradigm of how people are rewarded; millennials, in particular, look for a safe environment where they can take risks, be creative and innovative. They don't like to work for organisations that have a grade-based pay structure, and will instead for companies that have flexible working hours and role-based pay structures."
This point is supported by data from another recent Bayt.com survey that found that in addition to seeking advanced technology, a challenging work environment is highly desired among respondents in the Mena region. Other elements that were considered important in a workplace include work-life balance, fair evaluation and innovation and creativity.
Suhail Masri, VP of employer solutions at Bayt.com, said there is optimism in the market right now on salaries in the UAE increasing. "The Bayt.com Middle East and North Africa Salary Survey, conducted among working men and women in the UAE in partnership with YouGov, revealed that 66 per cent of respondents in the UAE believe that salaries are either increasing or staying the same. At the same time, 56 per cent of employees in the UAE expect to receive a raise in 2018, with 27 per cent expecting a raise of up to 10 per cent."
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