Salaries in the UAE are forecasted to outpace the inflation rate hike this year due to heightened demand for talent and overall economic growth. Mercer, a global human capital consultancy, anticipates an average salary increase of 4 percent in the UAE, in contrast to a 2.3 percent rise in inflation.
According to the 2024 Mercer Middle East Total Remuneration Survey, employees in energy companies can expect a slightly higher salary increase of 4.3 percent this year. Staff in consumer goods firms, on the other hand, are projected to see an average hike of 4.1 percent. Meanwhile, life sciences and high-tech companies are planning salary increases of around four percent.
In 2023, average salaries across all industries in the UAE saw a 4.1 percent increase.
Andrew El Zein, principal for Careers in the MENA region, noted that while there is stability, growth, and excitement in the UAE job market, a significant concern remains the cost of living, primarily driven by the increase in rents over the past couple of years.
Rents have surged significantly, with RERA (Real Estate Regulatory Authority) recently recalibrating its rent calculator, allowing landlords to charge higher rents. This is expected to impact employees’ finances significantly,” he said.
Rents in the UAE have been steadily increasing post-pandemic, attributed to the influx of foreign workers into the country.
Regional firms poaching UAE talent
Despite the escalating costs, El Zein emphasized the UAE’s abundant potential and opportunities, particularly in terms of sought-after jobs and critical skills.
“The UAE remains highly appealing for professionals seeking employment, given the presence of numerous local and multinational companies in the market,” he stated. “However, these companies face intensified competition both domestically and regionally, as they vie to attract and retain top talent.”
Elaborating on talent retention strategies, he mentioned a surge in efforts and inquiries regarding various long-term and short-term incentives, as well as other retention plans aimed at preserving key talent within organizations.
Addressing Emiratisation, he underscored the intense competition among private sector entities to recruit from this demographic. “There remains a substantial untapped workforce, particularly among Emirati women,” he added.
16% of UAE firms plan to hire
The Mercer Middle East Total Remuneration Survey for 2024 indicates that 16.3 percent of UAE firms are planning to increase their headcounts, while 7.8 percent intend to reduce their workforce this year. A significant portion, approximately 75.9 percent, of companies in the Emirates have no plans to either add or reduce their workforce.
The study, which encompassed the Middle East region, highlighted that the entire GCC region is poised to witness salary increases surpassing inflation this year. However, the broader region is grappling to match the growth pace seen in the oil-rich Gulf states.
Furthermore, 3.8 percent of firms in the UAE anticipate an increase in turnover rate for 2024, while 11.4 percent anticipate a decrease.
