Covid-19: UAE salaries back to pre-pandemic level for select employees

Dubai - Many employees in the SME sectors are still waiting for the salary cuts to be restored

Salaries of the employees in the UAE have been restored to pre-Covid-19 pandemic level in large corporate entities after a cut last year when the contagion was at its peak and companies were forced to take tough measures to tide over the healthcare crisis.

However, employees in small and medium enterprises (SMEs) are not so lucky due to the severe impact on the sector.

Unfortunately, their salaries have not changed much from last year and companies are largely deciding changes in wages based on an employee’s performance and ability to adapt and upskill in a bid to contribute to the organisation’s digital transformation efforts.

Human resources (HR) and recruitment consultants in the UAE believe that the salaries of the employees working in the SME sectors should rebound to the 2019 level from the third quarter of 2021 and go back to the pre-Covid-19 level by early 2022.

Jon Ede, Regional Director for the Middle East at Michael Page, said salary cuts were temporary across most industries last year.

“From what we can tell, most of those have now been removed and employees are enjoying their full salary once again. In 2021, businesses with high demand for niche talent will have to be competitive in terms of salaries and benefits to attract candidates, while those with a large talent pool to choose from will have more flexibility,” he said.

Mayank Patel, country manager at Adecco Middle East, a recruitment and HR solutions firm, said the average percentage of salary budget for this year has not changed much due to factors such as canceled events, conferences, training sessions, restricted trading, closed air space, meant that the SMEs have been the worst-hit.

“The post-Covid-19 pandemic world of work itself is very different. It’s more agile, freelancing, remote and flexible working. In that light to wish that salaries will go back to 2019 will not be appropriate to consider. But, yes, from the third quarter of 2021, the market should rebound to the 2019 level and we hope that most companies should go back to the normal way of work by December or January 2022,” Patel added.

He said there has been no rise in pay for mid to senior-level executives.

Performance bonuses and rewards

Patel noted that some companies are planning to have a long-term retention bonus or performance-driven bonus because organisations wouldn’t prefer to increase their fixed cost.

Also, some companies have delayed their usual appraisal cycles due to Covid-19.

Due to limited salary budgets, SMEs are prioritising annual awards, salary increases, incentives, and bonuses for employees in critical roles such as legal, technology healthcare, medical and pharmaceutical, added Patel.

Sectors offering a higher salary

Patel said pay rise can be greater among organisations that have exceeded their revenue during the Covid-19 pandemic or have their business models insulated from consumer spending fluctuations and therefore are less affected by economic downturns.

“Sectors such as technology, research, and healthcare, e-commerce, software development, pharmaceuticals, medical and digital marketing will tend to offer higher wage increase in order to retain their top talent and niche skills.

“Sectors that were heard hit during a Covid-19-pandemic such as retail, airlines, tourism will show a slow recovery basis how the pandemic will phase out in the region,” said Patel.

Jon Ede of Michael Page stated that multiple technology and digital businesses are emerging or growing and so the demand for talent in this area keeps increasing. These companies will have to follow their industry’s salary trends both to attract new workers and to retain existing ones.

waheedabbas@khaleejtimes.com