A new outlook from Korn Ferry indicates that employers in the UAE are preparing for a 4.1 per cent salary increase in 2026, placing the country just behind several GCC peers in next year’s regional pay rankings. Saudi Arabia is expected to offer the highest average raise at 4.6 per cent, with Qatar and Oman forecast at 4.3 per cent.
Although the UAE’s projection sits slightly below the 4.2 per cent average increase seen in 2025, Korn Ferry says the market’s direction reflects a shift toward more deliberate workforce planning rather than short-term reactions to inflation or sudden hiring needs. “The UAE has reached market maturity where compensation planning is no longer reactive,” said Vijay Gandhi, Korn Ferry’s Regional Director. “Organisations now focus on building the right capabilities for the next five years, requiring sophisticated reward and development strategies.”
Sectoral demand is shaping much of that strategy. Engineering, technology, logistics, finance, and accounting roles continue to see strong hiring momentum as companies diversify operations and adopt advanced digital systems. Banking, real estate, oil and gas, industrial enterprises, and retail are among the sectors expected to roll out some of the most generous pay adjustments in 2026, supported by steady investment flows and evolving business models.
The talent landscape is being transformed by rapid population growth and mobility. Dubai’s population has climbed past four million, while the UAE as a whole has reached 11.44 million, attracting both investors and a growing pool of jobseekers. This influx, combined with intensified competition from national transformation initiatives in neighbouring GCC countries, has pushed employers to reassess how they retain skilled workers.
Living costs are a defining pressure point. Rising expenses in housing, education, and day-to-day needs are contributing to stronger salary expectations across the workforce. Korn Ferry’s data shows that 80 per cent of employees in the UAE and Saudi Arabia would switch jobs for higher pay — a 25 per cent jump from last year. The firm notes that this shift underscores the need for employers to balance salary decisions with long-term development pathways and organisational design priorities.
Young professionals, in particular, are navigating slower career progression as hiring cycles lengthen and annual increases soften. Anis Abdeljawad of Korn Ferry said that many early-career workers are experiencing a gradual “reset” in their trajectories due to tighter market conditions.
Companies are also adapting to structural changes brought by automation. Forty-three per cent of firms surveyed plan to replace certain positions with AI, with operations and back-office roles most affected. This transition is expected to influence how future leadership talent is cultivated.
The broader regional environment continues to add complexity to compensation planning for UAE employers, as mobility within the GCC remains high and neighbouring economies accelerate their own diversification and investment agendas.
