Pay catching up with inflation
The UAE’s average basic salary increase of 8% is one of the highest in the Arab world region and is catching up with the country’s level of inflation, a new study reveals.
Inflation is still driving salary increases, which are slightly behind the 13.5% inflation in 2006 and forecasted inflation of 12% in 2007, as reported by Economic Intelligence Unit, according to Hay Group’s ‘Compensation & Benefits’ report released last week.
“Overall, the increases are more aggressive for professional and supervisory levels where the pay movement is between 7% and 13%,” Vijay Gandhi, a managing consultant at Hay Group, said in a statement on Monday.
“On average, breakdown of the remuneration mix is 56% base salary, 34% cash allowances, 6% variable bonus and 4% other non-cash benefits such as company car, children’s education and leave travel air tickets,” he added.
However, even with a median increase of 8.1% in salaries, disposable income has been dropping for the last couple of years, particularly for non-management jobs.
According to the report - based on information from over 264 employers throughout the UAE - differences in pay between local and multinational companies in the UAE are also narrowing down.
The pay disparity has declined to 10% - compared to a 24% gap in 2006 - as local companies have beefed up their pay packages more aggressively than multinational companies.
More organisations are also boosting up their allowances in a bid to retain talent, the report said.
“The increase in guaranteed cash component [basic salary plus the cash allowances] can be attributed to an increase in allowances by 15% and this has benefited the middle income groups in particular,” it stated. Source
Inflation is still driving salary increases, which are slightly behind the 13.5% inflation in 2006 and forecasted inflation of 12% in 2007, as reported by Economic Intelligence Unit, according to Hay Group’s ‘Compensation & Benefits’ report released last week.
“Overall, the increases are more aggressive for professional and supervisory levels where the pay movement is between 7% and 13%,” Vijay Gandhi, a managing consultant at Hay Group, said in a statement on Monday.
“On average, breakdown of the remuneration mix is 56% base salary, 34% cash allowances, 6% variable bonus and 4% other non-cash benefits such as company car, children’s education and leave travel air tickets,” he added.
However, even with a median increase of 8.1% in salaries, disposable income has been dropping for the last couple of years, particularly for non-management jobs.
According to the report - based on information from over 264 employers throughout the UAE - differences in pay between local and multinational companies in the UAE are also narrowing down.
The pay disparity has declined to 10% - compared to a 24% gap in 2006 - as local companies have beefed up their pay packages more aggressively than multinational companies.
More organisations are also boosting up their allowances in a bid to retain talent, the report said.
“The increase in guaranteed cash component [basic salary plus the cash allowances] can be attributed to an increase in allowances by 15% and this has benefited the middle income groups in particular,” it stated. Source
No comments:
Post a Comment