UAE Employers Risk Losing Expat Employees due to the Rising Cost of Living

With salaries lagging behind the rate of inflation in the UAE, employers should be concerned about their expat workforce, according to new research from recruitment consultancy Robert Half.

Robert Half’s 2023 Salary Guide shows that average salaries in the UAE have increased by 3.2 per cent over the past 12 months, while the Central Bank of the UAE projects inflation at 5.6 per cent for the year, piling increasing pressure on the finances of workers.

More than half (52%) of employees say that it is becoming harder to afford their monthly living expenses and, looking ahead, three in five (59%) are worried about the cost of living and its impact.

These difficulties are driving movement in the recruitment market, with 74 per cent considering a new role in 2023, and the majority of these (56%) say their primary reason is to secure a higher salary so that they can meet their financial obligations.

While retaining employees in general is important for businesses to achieve their growth targets, employers should perhaps be most concerned about their expat workforce. Nearly half (47%) of expats say that, if they were to leave the UAE, it would be most likely down to the rising cost of living – so with people feeling the strain, businesses should prepare for an exodus or take measures to support their workers.

Many employers have already taken steps to help their employees by increasing the financial support available. Three in 10 (31%) workers have received a pay-rise to help with the rising cost of living, and the same proportion have been offered extra bonuses and increases in their regular allowances.

Businesses are also looking to provide help in other areas, with a quarter (25%) of workers reporting that they have been offered mental wellbeing support and 18 per cent receiving finance training.

However, in order to look after their existing employees many business leaders are choosing to make cuts when it comes to hiring in new talent, which is affecting their competitiveness both within the UAE and worldwide. Additional insights from Robert Half’s 2023 Salary Guide reveal that employers are restricting allowances and moving costs for new overseas workers.

Commenting on the research, Gareth El Mettouri, Associate Director – Middle East, said, “The cost of living is one of the biggest concerns we are hearing from candidates and, make no mistake, people will move to secure the higher salaries they need to meet their obligations; expats may even move away from the area, with knock-on effects for the UAE economy. If employers want to retain their best talent and maintain productivity, they should be prepared to offer increased salaries, extra bonuses and higher allowances that ease the strain for their workforce.

“Where businesses are offering additional support, they are often restricting packages for new hires, which is impacting their ability to secure skilled talent from overseas. It is a tough choice to make at a time when businesses are striving to meet their growth objectives.”

Robert Half's 2023 Salary Guide includes insights on the trends affecting hiring in the UAE as well as providing the average starting salaries across more than 100 professional services roles.