Salaries are expected to outstrip the inflation rate this year in the UAE, buoyed by an upsurge in demand for talent and overall economic growth. Global human capital consultancy Mercer anticipates a 4 per cent salary increase across the UAE, in contrast to a 2.3 per cent rise in inflation.
The findings from the Mercer Middle East Total Remuneration Survey for 2024 indicate that employees in the energy sector can expect a 4.3 per cent wage increase, while those in consumer goods will see an average rise of 4.1 per cent. Life sciences and high-tech industries are not far behind, with planned salary hikes around 4 per cent. This follows a 4.1 per cent average salary increase across all industries in the UAE in 2023.
Andrew El Zein, principal for Careers in the MENA region at Mercer, highlights the UAE job market’s current stability, growth, and appeal. However, he notes that the escalating cost of living, particularly due to soaring rent prices, remains a significant concern for employees. The Real Estate Regulatory Authority’s (Rera) recent adjustment to its rent calculator reflects these rent increases, impacting workers’ financial well-being.
The UAE’s attractiveness as a work destination continues despite these challenges, driven by the presence of numerous local and multinational companies and the consequent competition for talent, not just within the country but also from regional firms aiming to attract UAE professionals.
To combat talent poaching, companies in the UAE are increasingly exploring various long-term and short-term incentives, alongside other retention strategies, to hold onto critical employees. The drive for Emiratisation also intensifies the competition among private sector organizations, particularly to tap into the underutilized segment of Emirati women in the workforce.
Mercer’s survey also sheds light on employment trends within the UAE, revealing that 16.3 per cent of firms plan to expand their headcount, while 7.8 per cent anticipate workforce reductions in 2024. A significant majority, 75.9 per cent, expect no change in their employee numbers. Additionally, the survey forecasts a mixed outlook on turnover rates, with 3.8 per cent of companies predicting an increase and 11.4 per cent expecting a decrease.