Payout Insights: Some Salaries More Resilient than Others during Pandemic

Emirati salaries were more resilient to the impacts of the Covid-19 pandemic than the rest of the working population in the UAE, that’s according to the new Hays 2021 Emiratisation Salary & Employment Report released today by the global recruitment experts.

According to the report, the majority (64%) of Emirati’s salaries remained the same in 2020 as in 2021, compared to a much lower 46% of expats who said the same. What’s more, when looking at the negative effects of the pandemic on pay, while 10% of Emirati’s had their salaries cut, more than double the number of expats (21%) experienced the same misfortune.

“On average, the national workforce has been exposed to fewer pay cuts and redundancies than the rest of the UAE’s working population. However, that is not to say that it has been unaffected by market conditions,” says Samantha Wright, Senior Recruitment Consultant of Hays Emiratisation division.

“From the survey responses, we estimate 9% of UAE nationals to have been made redundant in 2020, and specific to pay, UAE nationals actually received fewer pay increases than other professionals working in the UAE in the last 12 months.”
In agreement with this, the report found 33% of expat salaries to have increased in the past 12 months and a lower 25% of Emirati’s to have received a pay rise.

“Historically, it is true that Emiratisation mandates have meant that some jobs held by Emirati professionals have been protected or exempt from some downturns in the economy, and their pay significantly higher than expat counterparts. However, this is becoming less and less the case. Instead, the disparity in pay has plateaued since the local government reviewed pay scales in 2019 to reflect real market rates and we expect this to continue going forward.

While this could be viewed negatively by the local population, it has actually opened up employment opportunities for UAE nationals in the market. Particularly within private sector organisations, the hiring of Emirati talent is less of a sticking point than it has been in previous years based on company budget restrictions and we have seen job numbers increase across all industries”, says Samantha.

Looking at company type, the report found public sector organisations in the Abu Dhabi to pay the greatest salaries to UAE nationals – sometimes more than 40% higher than private sector organisations. However outside of the capital, salaries within the public and private sector are shown to be either the same or up to 10% higher in Government entities.

“Historically again, it was always government entities that provided the highest salaries to Emirati professionals however, this is becoming less common. As such, we have seen Emirati’s be more open to working for non-government entities, considering employers based on long term career development opportunities rather than just the salaries they offer,” comments Samantha.

Looking ahead

For 2021, expectations surrounding salaries are aligned for national and expat professionals in the UAE. The majority of UAE nationals (55%) expect their salary to remain the same as in 2020, 43% expect it to increase and 2% expect a decrease. Similarly, 52% of expats expect salaries to remain stable, 45% expect a pay rise and 3% expect a pay cut.

“These findings certainly reflect our own predictions. We do not expect the pandemic to negatively affect salaries further in 2021. Instead, we expect the majority of salaries to remain the same in 2021 as in 2020 with increases being paid to those hitting required performance targets, regardless of UAE national status,” says Samantha.

When it comes to job numbers, a significant 49% of UAE nationals and expats expect to move employer in 2021, suggesting much optimism for the number of available jobs in the local market going forward. Similarly, the report found 62% of Emirati professionals to be positive about their career prospects for the next 12 months.

“Our observations of the market certainly agree with this. We have already seen job numbers increase since the turn of 2021 and we expect this trend to continue going forwards, with an added number of opportunities for UAE nationals in the private sector compared to previous years.

This is a very exciting time for Emirati professionals. Thanks to ongoing investment from the government in education, training and development, the local population is as skilfully equipped as it has ever been and this is resulting in growing numbers of job opportunities being made open to UAE nationals. The UAE is well on its way to achieve its goal in being a competitive knowledge-based economy of the future”, adds Samantha.