As the UAE continues to attract a significant influx of expatriates, the market has a surplus of available talent, enabling employers to offer lower salaries and reduce benefits packages, said a recent report.

While companies may benefit from increased retention rates, this trend carries potential drawbacks, including decreased productivity and rising employee dissatisfaction, as workers may feel undervalued in an increasingly competitive job market, said the latest Robert Half salary guide.

Moreover, despite the abundance of candidates, there remains a challenge in finding individuals with the precise skills and UAE-specific experience required, leading some employers to compromise on their ideal candidate profiles due to budgetary limitations.

Hiring intentions and economic considerations

Business leaders in the UAE exhibit a positive outlook, with 63% anticipating an increase in headcount over the next year. Half of these leaders attribute the need for additional staff to organisational growth. However, economic factors such as global election outcomes and fluctuating interest rates have prompted a cautious approach, with approximately one-third delaying hiring decisions until there is greater economic stability.

There is a cautious optimism suggests that, as conditions stabilise, there may be a surge in hiring activity, intensifying competition for top-tier talent.

Employee perspectives and challenges

Employees are aware of the heightened job market competition, the report explains, which has diminished their leverage in salary negotiations. A significant 75% report increased difficulty in securing pay rises compared to the previous year, and 52% feel easily replaceable.

This environment has led 65% of employees to remain in their current roles out of necessity rather than preference, the report explains.

Despite this, two-thirds are considering a job change before the end of 2025, primarily driven by the rising cost of living and the need for higher salaries to meet financial obligations.

Morale and job satisfaction discrepancies

There is a disparity between employer perceptions and employee sentiments regarding job satisfaction and morale, the report explains. While employers may believe that morale has remained stable or improved, employees indicate otherwise, suggesting that over-optimism on the part of employers could overlook underlying issues.