Companies in the UAE are struggling to retain key talent within the financial segment and are now offering to increase remuneration to avoid losing them, new research has found.
A survey of finance leaders in the UAE by recruiter Robert Half found that one third (33 per cent) of them have increased counter offers in a bid to retain their key employees.
Respondents from Abu Dhabi saw a higher volume of counter offers (38 per cent) than their Dubai counterparts (29 per cent), the report stated.
The study also found that 33 per cent of senior finance professionals are much more likely to offer a sign-on bonus to attract top candidates than they were previously.
Gareth El Mettouri, associate director of Robert Half, said: “With counter offers increasing and a shrinking talent pool in both Dubai and Abu Dhabi, it is now more important than ever for businesses to act quickly in the hiring process.
“With the economy on the rise, companies need to be prepared to offer competitive benefits to attract and retain the most skilled professionals.
“While it is tempting for job seekers to use counter offers as a negotiating tool, they are not an effective strategy for businesses to retain staff in the long term,” he added.
The survey found that when asked how the trust between employee and employer was affected by counter offers, 72 per cent of UAE finance leaders said it has negatively impacted their trust in the employee.
The report emphasised that giving counter offers sets a bad precedent within the company and will encourage other staff members to use it as a negotiation tool.
It also warned that offering a counter offer to one employee maybe seen as favouritism to certain individuals, impacting team morale and productivity.
“To keep their best employees, companies should ensure they are paying their staff a competitive salary, benefits and bonus structure,” stated El Mettouri.
“A separate survey found that 40 per cent of candidates have remuneration expectations that are higher than what is currently on offer.
“Therefore, as more companies are vying for the limited talent on offer, businesses need to enhance their retention strategies or risk losing their best employees.”
Salaries across the UAE are predicted to rise 4.8 per cent in 2015, a study by human resources consultancy Aon Hewitt found.
The remuneration levels in the UAE were forecast to rise by 5.1 in 2014 but the actual level of increase fell short as salaries rose by just 4.6 per cent, the study added.