Global human capital consultancy Mercer projects that salaries will increase faster than the inflation rate hike in the UAE this year, driven by increased demand for talent and growth in the overall economy. Mercer anticipates that the average salary in the UAE will rise by 4 percent this year, compared to a 2.3 percent increase in inflation.
According to the Mercer Middle East Total Remuneration Survey for 2024, employees working in energy companies will experience a slightly higher salary increase of 4.3 percent this year, while staff in consumer goods firms will, on average, receive a 4.1 percent hike. Additionally, life sciences and high-tech companies intend to raise salaries by around four percent.
In 2023, average salaries across all industries in the UAE increased by 4.1 percent.
Andrew El Zein, principal for Careers in the Mena region, noted that although there is stability, growth, and excitement in the UAE job market, one of the major issues is the cost of living, primarily attributable to the rise in rents in the past couple of years.
“Rents have increased drastically, and Rera (Real Estate Regulatory Authority) recently recalibrated its rent calculator. That has shown an increase in the rent that landlords can charge. So that is going to be a concern and going to feel on the employees’ pocket,” he said.
After the pandemic, rents in the UAE have consistently risen due to the increased flow of foreign workers into the country.
Regional firms poaching UAE talent:
Despite the rising costs, El Zein emphasized that the UAE holds a lot of potential and opportunities, particularly in terms of in-demand jobs and hot skills.
“The UAE is very attractive for people who want to work here as there are many local and multinational firms in the market. Companies in the UAE are facing increased competition within the country and from other countries in the region, trying to attract and poach the talent,” he said.
He stated that to retain talent, there is extensive work and inquiries regarding various types of long-term and short-term incentives and other forms of retention plans aimed at retaining critical talent.
Regarding Emiratisation, he noted that private sector organizations are fiercely competing to attract this workforce. He emphasized, “There is still a large untapped workforce in the Emirati women segment.”
16% of UAE firms plan to hire:
The Mercer Middle East Total Remuneration Survey for 2024 revealed that 16.3 percent of UAE firms plan to increase their headcounts, while 7.8 percent intend to cut their workforce this year. Approximately 75.9 percent of companies in the Emirates neither plan to add nor reduce their workforce.
The study, which covered the Middle East region, found that salaries will outpace inflation this year in the entire GCC region, while the wider region is struggling to keep pace with 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 foresee a decrease.
