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UAE Companies Plan To Cut Workforce

As per the annual survey conducted by the consultancy Mercer, the direct impact of COVID-19 on the compensation and advantages landscape is less drastic than initially feared. Although 10 per cent of UAE companies reduced salaries temporarily, 30 per cent UAE companies plan to cut the workforce. Because the employees working from home the 25 per cent of the companies have reported an increase in productivity and the market yet experienced positive salary inflation.

In the United Arab Emirates (UAE), 17 per cent of the companies delayed managing out 2020 salary increases after the Coronavirus strike, most likely by six months and so on. These are the severe numbers produced on what United Arab Emirates (UAE) businesses are doing to cope with the pandemic result. Most of the bigger organizations have already gone through the procedure of headcount reductions; on the other hand, salaries were cut by 30-50 per cent. Until further notice, some of them yet retain the salary cuts.

The survey covered over 500 companies revealed a real annual salary increase of 3.8 per cent around the general market, even though with 19.4 per cent of the organization, indicating they froze salaries in 2020. Prior to the full economic impact of the government-mandated lockdown, remarkably, most 2020 budget and salary decision had taken place early in the year.

According to the Ted Raffoul, Career Products Leader, MENA at Mercer- It is very fostering to see that in spite of the economic challenges, a significant number of United Arab Emirates (UAE) employers have expanded salaries in 2020. In response to the business effects of Coronavirus, the 10 per cent of companies reduced salaries; however, almost all of these were on a temporary basis. UAE companies are making progress towards boosted business strategies even though uncertainty continues into 2021, with a majority of them expecting new working arrangements to continue to evolve towards permanent policies.

When the general market forecast a 2021 salary expand of 4 per cent, industry figures depends significantly. The most explicit proposed growth has come from the life sciences (4.5 per cent) and customer goods (3.8 per cent) industries. With a 1.9 per cent forecast, the energy industry continues to see some of the lowest increase in salaries. The Coronavirus resulted in the rapid implementation of remote and versatile working measures with 66 per cent of companies having devised new remote working policies; on the other hand, 25 per cent already had one in place. Due to this, a quarter of employers reported enlarging productivity and expected versatile working arrangements to continue to stay in place in a post Coronavirus landscape.

However the thirty per cent of UAE companies plan to cut workforce decrease of 10 per cent in 2020, the extent to which companies took this kind of action depends according to their industry and resilience to the impact of Coronavirus with the massive decrease in headcount occurring in the retail sector. In the logistics sector, there has been an increase in headcount in 2020, particularly express and last-mile delivery, in order to meet strong demand from the e-commerce boom, caused by the national stay-at-home –orders.

Although we expect uncertainty to span into 2021, the Total Remuneration Survey result promises a more optimistic new year because companies are increasingly reporting positive hiring sentiments compared to those indicated at the onset of the pandemic, as per to the Carolina Vorster, Workforce Products Leader, MENA at Mercer.

Once the pandemic is over companies, continue to the new normal with 55 per cent of them anticipating keeping versatile working arrangements and have employees have proved their commitment towards employees by providing one subsidy for remote workers like covering the cost of office set up, online learning, and furniture and many more.

Read More, Top Successful Entrepreneurs In UAE

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