Daijiworld Media Network - Dubai

Dubai, Oct 21: According to a Mercer survey Covid-19 made a direct impact on the compensation and benefits landscape however, it is less drastic than initially feared. 30 percent of UAE companies have plans to cut headcount while 10 percent of the companies reduced salaries on a temporary basis.

As a result of employees working from home, 25 percent of companies have reported increase in productivity and the market still experienced positive salary inflation.

The survey covered over 500 companies revealed an actual annual salary increase of 3.8 percent across the general market, although with 19.4 percent of organizations indicating they froze salaries in 2020.

Prior to the full economic impact of the government-mandated lockdown notably, most 2020 budget and salary decisions had taken place early in the year. Around 17 percent of companies delayed their 2020 increases due to the Covid-19 pandemic, typically for six months.

Ted Raffoul, Career Products Leader, Mena at Mercer said: "It is very encouraging to see that despite the economic challenges, a significant number of UAE employers have increased salaries in 2020. In response to the business effects of Covid-19, 10 percent of companies reduced salaries, but almost all of these were on a temporary basis. Although uncertainty continues into 2021, UAE companies are making progress towards enhanced business strategies, with a majority of them expecting new working arrangements to continue to evolve towards permanent policies."