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How will lower salaries affect people in UAE?

It is a well-known fact Covid-19 has caused many problems around the world, from reducing the workers by firing them, to reduce the amount of hours they are used to work. Now, of course it worries even the people who keep their jobs because ‘reducing the amount of hours worked’ means companies will lower salaries since employees are not working the whole shift.

In this article we will talk a little bit more in detail on how UAE’s companies have not fired their employees nor the amount of hours worked while other countries have had to lower the salaries for the employees or even reduce the payroll.

1.  What is the new norm in UAE to lower salaries about?

2. What are the thoughts of the employees about this topic?

3.  How has accepting a lower salary been around workers?

4. What are some of the lowest paying jobs salary?

5. How has the salary reduction been compared to UAE?

6. What are some advantages or challenges job seekers should take into account?

7. How Connect Resources help you know more about this new norm?

1.What is the new norm in UAE to lower salaries about?

Since the Covid-19 outbreak, in UAE as in many other countries, they implemented a norm which affects somehow the salary of workers in a considerably way. However, what some workers may not know how the minimum wage has changed during the past few months. Now, this means not only worries employees in a way, since their salary is going to be reduced but also because they think the so-called ‘new norm’ is going to be a long-term thing once life is back to normal.

Over the last couple of months in UAE, employees have had to face with a 20-50 percent cut in their salaries. Now, this is not a bad thing after all, unlike other countries where massive firings have been the main issue, in UAE the Ministry of Human Resources and Emiratisation allowed employees a different solution, which is working from home and a contract for a temporary or even a definite reduction in salary, all of this in agreement with the employee.

Several HR companies have also raised their voice to talk about some of the best approaches employers can have after all of the pandemic ends. This may bring good results to companies’ owners so they can know what to do after everything comes back to normal.

2. What are the thoughts of the employees about this topic?

This temporary salary cuts, even though have affected the employees one way or another, they seem to have accepted them, mostly because they did not have much options to choose from or they just simply liked the fact that at least they still  kept their jobs.

There are some things that need to be mentioned in order to make people understand how EUA is handling the situation with the pandemic.

  • Lower the salaries is something that it may be extreme but necessary nonetheless, so the employer is able to cover all the expenses and keep the company working despite all the things happening outside.
  • Workers who may have had a temporary contract now face a new reality which is lower their salary expectations in order to apply for a new job. If there was another scenario in which the employee had left the job, they may have been fired or they may be with no current job.
  • For many workers, these measures are understandable and they agree in having at least a payment rather than not having anything at all. So, as long as they are able to support their families somehow, as mentioned before, they will accept this new norm.

There always come times when you need counseling for certain topics. Facing a pandemic for most of the employers can be a difficult thing to deal with. Now, as many crisis faced before, it is recommendable to have a plan to overcome the situation the world or your company may be going through.

2.1 Implementing the idea of having foreign job seekers

The way UAE has handled the situation in general, is worth mentioning that you need to know a little bit why hiring foreign job seekers is a good solution for your company once everything comes back to normal and job seekers can travel to other countries in order to apply for a job there. Some of the benefits it can bring you are:

  • You get to have a more skilled and numerous set of employees willing to work once everything normalizes.
  • You save money with online training. In that way, once the new applicant is ready to travel you only need to show him the work environment.
  • It is well-known that due to this pandemic, lots of companies have moved their operations to online platforms, which have brought good results because workers have shown better development doing online tasks.

The first thing an employer needs to know is how to recruit the best candidates in order to save money and time  so they can get a good outcome. 

3. How has accepting a lower salary been around workers?

Accepting a lower salary is not what companies are used to when hiring new employees, however, applicants have lowered their salaries expectancies, and so their leisure activities. This as a result brings them a benefit, which is saving money so they can create a more balanced life, in terms of economy.

During the current situation, job applications decreased its number as soon as the global pandemic started, of course there has been new applicants and job opportunities available; but an average worker would not want to risk their position in a company where is being paid a certain amount of money to find themselves unemployed or being paid even less than the first job they were working at.

Now, as time went by this mindset changed because it does not matter if the job they apply for or their current job pays them lower salaries as long as they are able to sustain themselves.

4. What are some of the lowest paying job salaries?

According to many general recruiters, after they interviewed some businesses owners or employers said: ‘’these measures do not give us positive results, therefore we are not happy with them’’ however, they cannot do anything until the situation settles down and comes back to normal.

Also, recruiters say some workers have been contacted by the same companies they were working at, before the pandemic, to have lower salaries. This means, they are being offered less than they were offered before the outbreak. This opportunity has not been rejected by workers since they know they have some competences that are willing to accept the same position for the salary that company offers.

Companies, on the other hand, should know how much they are ready to offer to the applicant so the value of the employee is important and does not go under the table.

4.1 Most affected jobs with the new applied norm

According to some HR agencies, in the UAE, the lowest paying job salaries are marketing and teaching having less percentage of applicants than other professional fields, nearly a 60% dropped in these fields, this means, there has been a difference in the applications between January and April or May for example. Administration and management were the following jobs to be affected by this situation, now, Engineering and Finance had the smallest impacts regarding this situation.

While some sectors may have to deal with some regulations, such as: reduction of the hours worked and firing some workers, another sector highly affected by this situation is the health system, which are exposed to big sanitary and economical risks.

Another job worthy of mention is the tourism industry; it has been hit quite hard because airlines, hotels and travel agencies are not working as they normally do. Reducing the flights just to a few is another of the measures taken by some governments.

5. How has the salary reduction been compared to UAE?

It is quite impressive how UAE’s companies have done the impossible to maintain their workers working non-stop despite the pandemic. The situation in the UAE is kind of different because they have faced this situation with a different perspective.

Regardless of the situation and seeing some governments having to take drastic measures in their countries, UAE’s companies keep their face up and some companies even decided to increment the salary for the workers. Although, this idea does not apply for all companies, it is something that surely is uplifting.

On the other hand, not all companies are in the same track because there are some which prefer to stay paying the same amount of money to workers while there is a small sector which decided to lower salaries.

It has also being put in evidence that the inflation is lower than the salaries offered by companies. In UAE, a new increment of salary is expected to be applied during what is left of 2020 and next year. Also, several sectors such as ‘health system’ (medical attention), ‘energetic industry’ and jobs related to technology are expected to receive a significant increment of salary.

6. What are some advantages or challenges job seekers should take into account?

In difficult times like this and in many other aspects, job seekers need to know a few things in order to have a more effective job opportunity:

  • See this whole situation as a new challenge to grow and improve skills and have a bigger potential
  • Be always open to change is better, whether is by changing your career or your job position so you can do more things.
  • Do not measure your worth by the salary you are offered
  • Create a mindset based on the fact that companies are currently offering lower salaries percentage for workers due to the Covid-19.
  • Take as an example the current pandemic, create a more motivating environment for workers so they keep improving their skills. Companies should also have regular evaluations for their workers; also they should include temporary applicants to be more prepared for any crisis the company can face in the future.

Following these tips are surely going to be really helpful for you. As it has been said before, getting the best out of every bad situation or event that may seem dark is the best option when it comes to employees. That says a lot of your will to work and thrive no matter what happens.

7. How Connect Resources help you know more about this new norm?

Connect Resources

In order to get a wider point of view of how managing your companies in times like this, we recommend you to contact Connect Resources to receive a more specialized help and in other services you may need help with so you can overcome this Covid-19 crisis for example.

Within all of our services we have to offer, you can find how technology has affected the work and recruitment environment in this difficult times. It is recommendable to read articles like that taking into consideration the new phase we are going through, where everything is being done online, whether is teaching, working and talking. It will give you a better view on how to prepare your company for it.

We can also offer you services that can help you improve at some departments where you may need a little help such as consultancy for your HR department. You also have the opportunity to learn about our staff outsourcing in order to have a deeper point of view when hiring new foreign applicants and you can hire the best and qualified ones.

Would you like to contact Connect Resources to get more information about the lower salaries norm in the United Arab Emirates? You can call at +971 433 166 88 or send an email to contact@connectresources.ae, and you will talk to one of their representatives that will gladly answer all of your questions.

 

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