An influx of overseas job seekers has kept the lid on wage increases this year as inflationary pressures hit people in the pocket.
The findings in a survey released yesterday by Hay Group highlight a competitive jobs market and rising costs for housing, school fees and health care.
That will lead to slower growth in purchasing power as pay struggles to keep pace with costs, the global management consultancy said.
"We're seeing more supply from abroad, and not necessarily from the usual hunting grounds like India and Pakistan," said Vijay Gandhi, a regional director of Hay Group. "We're seeing more western supply, and that is also helping to stabilise the compensation market."
Of the 270,000 employees surveyed this year for Hay Group's UAE Compensation and Benefits Report, 44,000 had begun work for a new company in the past 12 months, as compared with 34,000 last year.
Expatriates from stagnant European economies tended to have lower salary expectations than those arriving from Asian markets, where economic growth was in the double digits, said Harish Bhatia, Hay Group's unit manager in the Middle East, and the report's author.
Basic salaries across all sectors grew by 4.4 per cent this year, compared with 4.9 per cent last year, according to Hay Group.
Basic salary increased 5.8 per cent in oil and gas, followed by a 5.5 per cent increase in retail and 4.8 per cent in transport.
Of the more than 600 companies surveyed by Hay Group, 85 per cent increased salaries in the past 12 months, with none reporting a cut in wages.
Salaries are forecast to increase by 5 per cent next year. The growth will be driven primarily by the retail sector, which is forecast to post salary increases of 6 per cent during the coming year.
But higher inflation meant that such salary increases would represent a much smaller increase in employee purchasing power, said Mr Gandhi.
Employer perceptions of inflation was far greater than that suggested by mainstream figures, he said.
"When we ask HR professionals what the assumed rate of inflation is that they're using for next year that figure is double the official number, close to 5 per cent," said Mr Gandhi. "In the next two years we don't see real incomes rising by more than 2.5 per cent, but this is still far better than previous years where we've seen zero to negative purchase power growth."
Purchasing power increased by 3.3 per cent this year, compared with 4.2 per cent last year. The figure is forecast to fall to 2.5 per cent next year.
Rising costs of housing, insurance and children's tuition fees were key inhibitors of consumer purchasing power, added Mr Gandhi.
"The Government has kept a cap on rental and tuition increases, but this is a temporary band-aid solution to a medium-term issue that won't go away until more housing and schools are built," he said.
Health insurance premiums are forecast to rise between 25 and 30 per cent in the coming year in response to rising in-patient charges from hospitals, said Mr Gandhi.
Private-sector employers continued to face challenges in the hiring and retention of Emiratis, said Mr Bhatia. The report found that 80 per cent of nationals worked in oil and gas, banking and the public sector.
"These sectors pay around 20 per cent higher than the rest of the private sector aggregate," he said. "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."
Hay Group's report found that there was very little discrimination between men and women when it came to salaries. The difference between men and women's pay for equivalent roles was less than 1 per cent, the report found.
jeverington@thenational.ae
'Downton Abbey: A New Era'
Director: Simon Curtis
Cast: Hugh Bonneville, Elizabeth McGovern, Maggie Smith, Michelle Dockery, Laura Carmichael, Jim Carter and Phyllis Logan
Rating: 4/5
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
COMPANY%20PROFILE
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The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
COMPANY%20PROFILE
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Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
Joker: Folie a Deux
Starring: Joaquin Phoenix, Lady Gaga, Brendan Gleeson
Director: Todd Phillips
Rating: 2/5
DMZ facts
- The DMZ was created as a buffer after the 1950-53 Korean War.
- It runs 248 kilometers across the Korean Peninsula and is 4km wide.
- The zone is jointly overseen by the US-led United Nations Command and North Korea.
- It is littered with an estimated 2 million mines, tank traps, razor wire fences and guard posts.
- Donald Trump and Kim Jong-Un met at a building in Panmunjom, where an armistice was signed to stop the Korean War.
- Panmunjom is 52km north of the Korean capital Seoul and 147km south of Pyongyang, North Korea’s capital.
- Former US president Bill Clinton visited Panmunjom in 1993, while Ronald Reagan visited the DMZ in 1983, George W. Bush in 2002 and Barack Obama visited a nearby military camp in 2012.
- Mr Trump planned to visit in November 2017, but heavy fog that prevented his helicopter from landing.
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
COMPANY%20PROFILE%20
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The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
Most%20ODI%20hundreds
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South Africa v India schedule
Tests: 1st Test Jan 5-9, Cape Town; 2nd Test Jan 13-17, Centurion; 3rd Test Jan 24-28, Johannesburg
ODIs: 1st ODI Feb 1, Durban; 2nd ODI Feb 4, Centurion; 3rd ODI Feb 7, Cape Town; 4th ODI Feb 10, Johannesburg; 5th ODI Feb 13, Port Elizabeth; 6th ODI Feb 16, Centurion
T20Is: 1st T20I Feb 18, Johannesburg; 2nd T20I Feb 21, Centurion; 3rd T20I Feb 24, Cape Town
Company%20profile
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Company%20profile
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COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
Company%20Profile
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SPEC%20SHEET%3A%20APPLE%20TV%204K%20(THIRD%20GENERATION)
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Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
What is graphene?
Graphene is extracted from graphite and is made up of pure carbon.
It is 200 times more resistant than steel and five times lighter than aluminum.
It conducts electricity better than any other material at room temperature.
It is thought that graphene could boost the useful life of batteries by 10 per cent.
Graphene can also detect cancer cells in the early stages of the disease.
The material was first discovered when Andre Geim and Konstantin Novoselov were 'playing' with graphite at the University of Manchester in 2004.
Company%20Profile
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Specs%20
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info-box
COMPANY PROFILE
Company name: Happy Tenant
Started: January 2019
Co-founders: Joe Moufarrej and Umar Rana
Based: Dubai
Sector: Technology, real-estate
Initial investment: Dh2.5 million
Investors: Self-funded
Total customers: 4,000
UAE%20SQUAD
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The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
Difference between fractional ownership and timeshare
Although similar in its appearance, the concept of a fractional title deed is unlike that of a timeshare, which usually involves multiple investors buying “time” in a property whereby the owner has the right to occupation for a specified period of time in any year, as opposed to the actual real estate, said John Peacock, Head of Indirect Tax and Conveyancing, BSA Ahmad Bin Hezeem & Associates, a law firm.
Why does a queen bee feast only on royal jelly?
Some facts about bees:
The queen bee eats only royal jelly, an extraordinary food created by worker bees so she lives much longer
The life cycle of a worker bee is from 40-60 days
A queen bee lives for 3-5 years
This allows her to lay millions of eggs and allows the continuity of the bee colony
About 20,000 honey bees and one queen populate each hive
Honey is packed with vital vitamins, minerals, enzymes, water and anti-oxidants.
Apart from honey, five other products are royal jelly, the special food bees feed their queen
Pollen is their protein source, a super food that is nutritious, rich in amino acids
Beewax is used to construct the combs. Due to its anti-fungal, anti-bacterial elements, it is used in skin treatments
Propolis, a resin-like material produced by bees is used to make hives. It has natural antibiotic qualities so works to sterilize hive, protects from disease, keeps their home free from germs. Also used to treat sores, infection, warts
Bee venom is used by bees to protect themselves. Has anti-inflammatory properties, sometimes used to relieve conditions such as rheumatoid arthritis, nerve and muscle pain
Honey, royal jelly, pollen have health enhancing qualities
The other three products are used for therapeutic purposes
Is beekeeping dangerous?
As long as you deal with bees gently, you will be safe, says Mohammed Al Najeh, who has worked with bees since he was a boy.
“The biggest mistake people make is they panic when they see a bee. They are small but smart creatures. If you move your hand quickly to hit the bees, this is an aggressive action and bees will defend themselves. They can sense the adrenalin in our body. But if we are calm, they are move away.”