The introduction of value added tax (VAT) in the UAE from early next year is one of the main factors boosting job creation in the country, according to a new report.
This year, the UAE is anticipated to see new hires in areas including consultancy, advisory, legal, strategy and tax, along with big infrastructure projects, the report by recruitment firm Cooper Fitch (erstwhile Morgan McKinley) found.
“Other areas, such as supply chain and manufacturing have also shown signs of recovery, but to a lesser extent, as have the energy and oil and gas sectors, with reasonable job creation and head count approval predicted for 2017,” it said.
“The imminent introduction of VAT in the UAE, and across the GCC, is believed to be the biggest contributor for job creation in the year ahead,” it added.
Up to 80 per cent of CEOs surveyed by the company expect a headcount rise of 1-4 per cent for the year. While 10 per cent plans to increase their headcount by 5 to 9 per cent this year, 5 per cent of CEOs also projected hiring growth of over 10 per cent. Meanwhile 5 per cent said they plan to reduce their workforce by between 1-4 per cent in 2017.
Hiring in 2016 remained slow with job losses also recorded in certain sectors.
“We have seen salaries reduced or remaining flat in certain industries and it was a particularly tough year for the banking and energy sectors,” the report said.
“Overall, the economy was sluggish, due in part to poor consumer confidence and low commodity prices. The number of new jobs coming onto the market was lower than in 2015, resulting in a softening of salaries for the year as a whole.”
However, with the outlook for 2017 improving and market sentiment looking “reasonably positive”, Cooper Fitch expects to see increases in salary levels this year.
“We predict that salaries will rise by between 4-6 per cent, dependent on the GDP and commodity prices. However, there are significant differences in recruitment forecasts according to sector (with some more likely to perform better than others), directly impacting salary performance.”
Banking remains uncertain for 2017 with a significant number of mergers planned for the next 12 months.
The overall salaries across finance functions are only expected to increase “marginally above the inflation level” this year, the report stated.
On the other hand, due to an increase in the approval of projects ahead of Expo 2020, the demand for auditors and specialist advisors is expected to grow. “We anticipate a 5 per cent increase on salaries, with additional benefits being introduced at various levels through 2017,” the report said.
Those in digital marketing can expect salary hikes of between 10-12 per cent, while HR salaries are anticipated to increase by approximately 3.5-5.5 per cent in 2017.
In the property sector, salaries are expected to remain the same across managerial positions, while critical positions in each individual firm can expect an average of 5-7 per cent increase.
“Construction companies will continue to be cautious in relation to salaries in 2017, due to increasing competition in the market driven by working on very low margins in order to secure
projects. However, companies will need to increase budgets if the goal is to attract key individuals from their main competitors,” the report added.