UAE to expect salary increase at the beginning of the new year 2024
The "Salary Guide UAE 2024," a new research by Cooper Fitch, projects a 4.5% rise in wages in the United Arab Emirates in the year 2024.
As The strong success of non-oil industries, particularly real estate, is seen as a major reason for the optimistic outlook.
Anticipated 4.5% Salary Increase in the UAE for 2024
According to the report, a majority of surveyed firms, accounting for 53%, are planning to increase their employees' salaries in the coming year. Among these, 39% intend to implement a moderate increase of up to 5%, while a notable 10% plan higher adjustments, ranging from 6 to 9%, and 5% of companies are preparing for substantial increments of 10% or more.
However, the report reveals a surprising trend, with 21% of firms expressing an intention to lower salaries in 2024. This development raises eyebrows, especially considering the heightened demand for top-tier talent in the competitive job market. Additionally, over a quarter of surveyed firms have no plans to revise employee wages in the upcoming year.
Economic Outlook and Growth Projections
The economic growth forecast for the UAE suggests a moderation to nearly 3% in 2024, a notable decline from the previous year's impressive 7.9%. Non-oil sectors, particularly real estate, travel and tourism, and aviation, are expected to continue spearheading the country's economic expansion.
Review of 2023 Salary Trends
In retrospect, the Cooper Fitch survey indicates that 81% of firms either increased or maintained employee salaries in 2023. Over half of these firms (54%) opted for salary raises, emphasising sustained demand for talent in the UAE job market. Notably, around 8% of companies implemented substantial wage increases of more than 10%, underscoring the importance of talent retention within specific sectors.
Annual Bonus Plans
The report also sheds light on annual bonus plans for 2023, with 71% of companies intending to issue bonuses based on their respective financial performances. Among these companies, 35% plan to award bonuses equivalent to one month's basic salary, while others allocate bonuses ranging from two to six months' salary. Sectors such as accounting, chemicals, consumer goods, and hospital and healthcare are poised to provide more generous bonuses, with certain fields offering up to six months' basic salary.
However, some industries, including financial services, consulting, and IT, do not plan to issue bonuses. The survey highlights that, beyond fixed remuneration, factors such as bonuses and remote work options are increasingly influencing the UAE job market.
Jack Khabbaz, Managing Partner and CEO of Public Sector Advisory at Cooper Fitch, emphasised the evolving role of factors beyond fixed remuneration in talent retention within the UAE job market.
