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'Local companies, on the other hand, might adjust both pay and benefits, but usually the first to go is bonuses, and then - in this region - they are more likely to freeze, rather than cut back, on salaries,' Wiesner said.
Wait-and-see approach
Many companies say they are still evaluating the situation.
'A lot of our clients are taking a wait a see and approach. They tell us they see no immediate need to lay off people or cut salaries, but the situation may look different a year from now. We will see over the next 6-12 months the real effect of the downturn, particularly on Dubai and its economy.'
One fact of life that employees should expect is that salaries will remain relatively flat for the time being. 'Recently we had high inflation - up to 14% - and pay increases that were close to that figure but not 100% keeping up.
'So what I expect this year is lower inflation and lower pay increases justified by the global financial situation. Again we will hear similar complaints from employees this year because of the situation in terms of the percentage growth versus inflation is similar to what it was last year,' Wiesner said.
Another trend that employees are likely to see is more pay packages based on performance. 'We have quite a lot of organisations coming to us looking at more performance-related payment schemes, but I would not say that this is particularly driven by the current economic situation.
'This is a general cultural change that has been happening here over the past two to three years, where organisations are looking for payment structures with higher bonuses relative to salaries. I think organizations now have a stronger incentive to go down that route,' he noted.
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Jeff Florian, Senior Reporter
