There is a significant increase in the number of candidates applying for entry-level financial positions in the UAE. It is resulting in a decline in average starting salaries.
The latest report from Robert Half, a recruitment consultancy, indicates that finance and accounting roles have “taken the biggest hit.” As a result, average salaries have decreased by 2.1%, with some corporate accounting positions experiencing drops as high as 23%.
Factors Behind Salary Drops
The main reason for this decline is the influx of expatriate talent seeking new opportunities in the UAE. Many qualified professionals are moving to the region in search of jobs, drawn by factors such as the appeal of a tax-free environment and the potential for career advancement. This oversaturation in the job market has led to fierce competition among candidates for available positions, ultimately pushing down starting salaries.
“While there is still a demand for accounting skills—especially those related to financial planning and tax—an influx of expats arriving in the UAE without jobs is pushing down their market value,” stated Robert Half. This situation allows businesses to be more selective and offer lower starting salaries.
The Impacts on Employee Satisfaction
“Even though the surge of expats has made hiring easier and more cost-effective for companies, corporate leaders need to consider how this might affect their current employees,” warned Gareth El Mettouri, Director – Middle East at Robert Half. Many existing employees are feeling stuck and dissatisfied due to their inability to secure pay raises, whether in their current positions or through new opportunities, which could harm overall productivity.
“Employers need to take proactive measures to retain their top talent; otherwise, they risk losing them when the job market changes again,” he added.
Trends in Other Job Roles
While starting salaries in finance and accounting are declining, other fields, particularly in-house legal roles, are seeing a different pattern. The average starting salaries for these positions have increased by 15%. This rise is primarily fueled by heightened interest from global investment firms in UAE businesses, along with a rise in private companies exploring initial public offerings (IPOs) that necessitate experienced legal assistance.
Rising Costs and Employee Satisfaction
Employers should recognize that even though they currently have the advantage in negotiations, they must not take for granted the importance of retaining their existing talent. A report from Robert Half reveals that while 70% of employers have noticed an increase in worker satisfaction over the past year, only half of employees share that sentiment. This gap may indicate limited opportunities for salary increases and career advancement within the organization.
Additionally, many employees are feeling the strain of rising living expenses. The report states, “A third of employees agree that they need a higher salary to meet their obligations.” This financial pressure complicates the job market further, especially as the drop in starting salaries, combined with an oversupply of expatriate talent, is hindering salary growth in current positions. Notably, three-quarters of employees believe negotiating a pay raise has become more difficult than a year ago.
Conclusion
The UAE’s current environment for finance and accounting jobs poses significant challenges for employers and employees. As starting salaries decrease, competition for entry-level roles becomes fiercer, creating a tough situation for newcomers in the job market. Companies must navigate these changes thoughtfully to maintain employee satisfaction and avoid losing valuable talent as the market shifts. For job seekers, grasping these dynamics will be crucial in negotiating their value in an evolving employment landscape.
