Businesses in Dubai are rapidly modernising their HR services as average expatriate salaries soar, according to experts.
Dubai has attracted many international companies and employees over recent years, as it bids to become a global economic superpower.
Managing the UAE’s HR Environment, a report by Mercer HR Consulting, showed that average salaries for expatriate staff rose by 6% last year. Daily allowances rose by more than 20%, and multinationals now pay an average of about £240 a day for executive expats on short-term assignments in Dubai – one of the seven states that make up the United Arab Emirates (UAE).
These soaring costs are leading companies to be more creative with their HR practices, according to Markus Wiesner, head of Mercer’s UAE operations.
“Local firms have tended to operate with a fairly basic HR infrastructure,” he said.
However, with the rapidly expanding business environment, companies in Dubai have seen the need to adapt and align their infrastructure more closely with international employment models.”
Employers are focusing more strongly on the concept of reward in light of the rising salaries, according to Wiesner. Bonuses and performance-related pay represent an increasingly high proportion of the average reward package.
Local salary data also shows a considerable gap between base salary rates offered to locals and expatriate staff, the report said.
Expat workers are paid a premium for their experience, to cover their relocation costs and due to the high cost of rented accommodation and hotels in Dubai. Inflation in the UAE is also running at more than 10%.