Around 60% of UAE employers chose to keep salaries and bonuses unchanged during the first half of 2024, shifting their focus to providing allowances as a way to retain talent, according to a recent report by global HR solutions firm Adecco.
The study revealed that nearly 24% of companies in the UAE have adopted alternative compensation strategies, such as offering housing and annual bonuses, to attract and keep top employees without raising base salaries.
“The dynamics of the talent market are influencing salary decisions, particularly in high-demand industries like information technology, where companies are more likely to offer competitive packages and allowances to retain key talent,” Mayank Patel, Senior Vice President at Adecco and head of EEMEA, said in a Khaleej Times report
The report highlighted that some employers avoid increasing base salaries to manage gratuity costs, opting instead to enhance compensation packages through various benefits. The trend is also driven by factors like inflation, fluctuating consumer spending, and a focus on cost optimization through automation and digital transformation.
Industries such as IT, retail, banking, and financial services have seen slower salary growth so far in 2024, according to the study.
The report also noted that a separate survey in July found that 67% of UAE employees were considering switching jobs due to reasons like limited career progression, rising living costs, and uncompetitive pay, indicating a growing trend in job mobility.