Alarm – for Private sector in 2011

UAE is oversupplied with talent which can be hired cheaply compared with the heydays of 2007/08. In 2011, The private sector reducing salaries and perks is widely whispered. As they believe that they can still hire people cheaply and that there is no problem in the supply of people. Existing staff still employed can expect a reduction in salary to be discussed in 2011 along with a reduction in quality of benefits, such as cheaper healthcare, cheaper flights cutting on perks & extra benefits.

If a company feels comfortable with revenues and their sustainability, then senior executives are going to receive an increase, either in the basic salary or in some of the allowances offered. Senior executives know from the beginning that they are not simple employees, waiting for a salary increase, but they contribute in making this happen.

The international markets are not solid yet, so all companies are very cautious as per the increase of their expenses (including expenses in human capital). Companies will be making rational decisions for their expenses and will avoid the huge remunerations of the past that were not really paying back in productivity and profitability. This is indeed a way that most companies will choose for their operations in the next year(s) , considering the current global economic scenario, hikes may not be expected.

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