Friday, April 01, 2005

Higher rents in the UAE may force senior executives to switch employer - Albawaba

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Faced with substantially higher rents for residential accommodation, over half of all senior executives in the UAE are planning to demand a pay increase or switch to another employer, according to results of a survey conducted by

The survey found that while rents this year were on average 26% higher than the previous year, average salaries had only risen by 1.5% in the same period, causing a substantial shortfall in most employees' cash flow.

According to the survey results published by GulfTalent, Dubai had the highest average rent increase at 27%, followed by Sharjah with 25% and Abu Dhabi in third place with 23%. Nationwide, rents for apartments went up by around 24%, while room rents shot up at a staggering 31%.

Salaries continue to stagnate, with most respondents reporting no rise in pay. Average wage increase for the country amounted to 1.5%, with public sector leading the increase at 2.8%, followed by multi-nationals at 2.0% and local companies at 0.8%. Rather surprisingly, senior executives experienced a below-average increase of just 0.7%, possibly due to the increasing number of international executives now willing to relocate and work in the UAE.
When asked how they planned to deal with the increased rent pressure, responses varied significantly. 35% of all people polled by GulfTalent planned to switch employers or ask for a pay rise, while this figure for senior executives stood at 55%. Although the possibility of being banned was a concern, many were still willing to take a chance.

Other common reactions revealed in GulfTalent's survey were to send families back home or relocate to another Emirate. About 6% of Dubai-based respondents planned to relocate to Sharjah, while 7% of those in Sharjah planned to move to neighboring Ajman. Responses also varied across Emirates. 12% of Sharjah residents planned to send their families back home, compared to an average of 5% in Dubai and Abu Dhabi. Over 24% of those working in Sharjah and Abu Dhabi planned to ask for a pay rise, compared with just 14% in Dubai, reflecting the greater bargaining power of employers based in Dubai.
© 2005 Mena Report (

The entire GulfTalent rent report, as well as other UAE labor market reports by GulfTalent can be found here.

Churning: in the job and property leasing sector
Quoting from the rent report: "The increased turnover in the job market is likely to be greatest at the senior and executive level, where salaries have had the lowest increase and candidates are generally more mobile. Many of the resulting vacancies are likely to be filled with newcomers from outside the UAE, therefore creating a similar churn in other associated sectors such as the property leasing market."


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