2011 Pay: Up, Down, and Up Again.

2011 Pay: Up, Down, and Up Again.

Mercer says pay rises and increased headcounts are on the cards for UAE companies – but Eva Fernandes knows the market far too well to get her hopes up on this one.

December 21, 2010 5:19 by Eva Fernandes

When my colleague wrote the story “Pay down, expenses up“, my friend asked me whether my editor was trying to send me a message. I laughed at his little joke, but couldn’t shake the eerie feeling that there may be some truth to that – after all 2010 hasn’t exactly been the year of recovery we all hoped it would be.

The market has been showing signs of a slight recovery, with even a few companies that managed to ride out the recession starting to hire staff. But in general, you don’t need to be an economist to know we’re still a long way from the boom time.

Last week, recruitment expert Matthew Carter, Managing Director at McArthur Murray, told Emirates 24|7 that private sector employees have little to look forward to in the upcoming year. Except pay cuts, that is. He argued, very rationally, that a surplus of talent in the market will allow employers to get away with cutting employees salaries and offering cheaper benefits. Speaking to the one time paper Murray said “Existing staff still employed can expect a reduction in salary to be discussed in 2011 along with a reduction in quality of benefits (…) the private sector is generally struggling still irrespective of the PR in the market. I can’t see the employers offering increases in 2011 to existing staff. Only in some very niche markets such as renewable, nuclear and possibly oil and gas can we see the trends being different.”

Though painful to hear, it’s a rather legitimate argument when you think about it – and with Kipp’s friends and family still getting the axe, it definitely reflects our anecdotal evidence of the reality on the ground.

But then there’s that PR in the market. Today a report in Emirates 24|7 says the exact opposite to Carter. Apparently a recent survey by global HR firm Mercer has found a big jump in the number of UAE firms planning to increase pay and hire new staff. Mercer’s head Bassam Gazal told Emirates 24|7 that, “Two-thirds of the 140 firms we surveyed across the Emirates told us they would raise headcount in 2011. Not one firm we spoke to was planning to cut numbers. This is a big shift in mood and in planning and we expect this optimism to deepen as the New Year comes around.” Better than that, the average pay increase is expected to be 6.2 percent, with no firms considering a freeze.

Increased pay and additional help does sound like something Kipp could do with, but these speculations, I fear, will remain just that – speculations. After all, the average increase being 6.2 percent would be great, but in 2010 it was apparently 5.2 percent, and I’m betting most people didn’t see that.

Do you think your company is doing so exceptionally well that not only will it be increasing staff numbers, but it will also be dishing out raises and bonuses by the bucket load? Or are you with Kipp in thinking this is nothing but wishful thinking? Yes, that’s what I thought.