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Jobs in UAE: Firms are hiring again, but offering 15-20% lower salaries

Waheed Abbas/Dubai
Filed on June 13, 2020
UAE, employer, job market, dubai jobs, hiring

Temporary pay cuts and 4-day work week are the new norm as firms go for cost cuts.

With the gradual reopening of the UAE economy, hiring for jobs is once again ticking up, but with a twist in the tale.

Companies recruiting new employees now are offering a 15 to 20 per cent lower salary package than what they offered during the pre-Covid-19 period.

Consultants also maintain that temporary pay cuts and a 4-day work week are the new norm for some firms as they eye a tighter control on their costs.

They said the market dynamics is being dictated by the fact that expatriate jobseekers would want to settle down quickly in the UAE even with a lower salary to avoid moving back to home country. At this stage, it's an employer's market with job losses in key sectors in the UAE.

"The good news is that new hiring is slowly picking up as we see more organisations getting back physically to work and starting to fill the essential roles which were stalled per-Covid. The temporary drop in base pay for 3 to 4 months for existing jobholders should end by August/September in a majority of the companies. The average drop we foresee for new joiners is 15-20 per cent less than people working at the same level," said Vijay Gandhi, regional director for Korn Ferry.

He said the nature of work is changing, too, and employers need not replace like-for-like roles. Employers now seek superior skill and talent which is adaptable, fuelling the digital change businesses want to achieve to move forward.

Professional networking site LinkedIn confirmed last week that hiring in the UAE is in the recovery stage from a steep fall due to the coronavirus pandemic.

Salary growth will take time

Gandhi noted that the UAE, like the wider GCC region, continues to provide a competitive total reward if not higher than jobs of similar nature in other parts of the world.

"The salary growth for new joiners will take time as business re-invents for the new normal and optimises with better technology and choosing what they need to start, stop and continue doing," he added.

Jason Grundy, managing director for Middle East and Africa at Robert Walters, said there is no doubt that the global pandemic will affect salary levels in the short-term but the UAE has a track record of bouncing back from global events. "I would expect a drop in the number of new roles available rather than significant and permanent salary reductions going into 2021," he added.

4-day work week, pay cut is the new norm

Grundy added that several companies are resorting to a 4-day work week and salary sacrifices which are temporary and, in some cases, on a voluntary basis.

"Some organisations are reducing their staff's working hours to reflect the market and this, in turn, shrinks the fixed costs. Other are simple reducing pay. The 4-day work week is common across professional services companies but those in the likes of hospitality and travel have had much more severe cuts. The key to holding onto critical staff will be when these cost-saving mechanisms are switched off," he added.

"Wage deflation is happening in parts of the market but only the most essential and in some cases rarest skill-sets are being hired. The competition for such talent helps maintain pre-Covid-19 salary levels," he added.   

-waheedabbas@khaleejtimes.com





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