As the UAE’s economy continues its upward trajectory, salaries are projected to rise faster than the inflation rate this year, fueled by increased demand for talent and overall economic expansion. According to the Mercer Middle East Total Remuneration Survey for 2024, various sectors are poised to witness notable salary hikes, indicating a positive outlook for employees across industries.
Salaries Surpassing Inflation: Mercer forecasts an average salary increase of 4 percent in the UAE for the year, outstripping the 2.3 percent rise in inflation. This trend reflects the robust growth and vitality of the job market, positioning employees for improved purchasing power and financial stability.
Sectoral Insights: Different sectors are expected to experience varying degrees of salary growth. Energy companies are projected to offer a slightly higher salary increase of 4.3 percent, followed closely by consumer goods firms at 4.1 percent. Similarly, life sciences and high-tech companies plan to hike salaries by around 4 percent, underscoring the buoyancy of these industries in the UAE’s economy.
Cost of Living Concerns: Despite the positive outlook, concerns persist regarding the rising cost of living, primarily attributed to escalating rents in recent years. Andrew El Zein, principal for Careers in the Mena region, highlighted the impact of rent increases on employees’ finances, urging attention to this critical issue.
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Competitive Talent Landscape: Amidst rising costs, the UAE remains an attractive destination for talent, with abundant opportunities across local and multinational firms. However, intensified competition within the country and from regional counterparts underscores the need for employers to implement effective retention strategies to retain critical talent.
Emiratisation and Workforce Plans: Efforts towards Emiratisation continue, with private sector organizations vying to attract Emirati talent, particularly within the untapped Emirati women segment. The Mercer survey revealed that 16.3 percent of UAE firms plan to increase their headcounts, highlighting continued optimism in hiring trends.
Regional Trends: Across the GCC region, salaries are expected to outpace inflation, reflecting broader economic resilience. However, the wider Middle East region faces challenges in keeping pace with the oil-rich Gulf states, emphasizing the unique dynamics shaping the regional job market.
Conclusion: As the UAE’s job market evolves, the outlook remains positive for employees, with salary growth outpacing inflation and ample opportunities for career advancement. Strategic measures to address cost-of-living concerns and retain talent will be pivotal in sustaining the momentum of economic growth and ensuring a thriving workforce in the years ahead.
