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More than half of UAE companies to hike salaries in 2024: Survey

More than one-third of the surveyed firms plan to raise wages by up to 5 per cent

Published: Wed 20 Dec 2023, 9:17 AM

Updated: Wed 20 Dec 2023, 11:06 PM

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Salaries in the UAE are expected to increase by 4.5 per cent in 2024 on the back of strong performance of the non-oil sectors, especially real estate, said a new report released on Wednesday.

According to a “Salary Guide UAE 2024” report released by Cooper Fitch on Wednesday, the majority – 53 per cent – of firms expect to increase their employees’ salaries next year. More than one-third – 39 per cent – plan to raise wages by up to 5 per cent, almost one in ten by 6 to 9 per cent; and one in 20 (5 per cent) is preparing for an increase by 10 per cent or more.

However, more than one-fifth – 21 per cent – of firms expect to lower salaries in 2024, which is surprising given the increased demand for the best talent. While more than a quarter have no plans to revise their employees’ wages during the coming year, Cooper Fitch said.

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The UAE’s economic growth will moderate to nearly three per cent year as compared to last year’s 7.9 per cent. Among non-oil sectors, real estate, travel and tourism and aviation will continue to lead the UAE’s economic growth.

2023 salaries

Cooper Fitch survey found that more than four-fifths – 81 per cent – firms either increased or made no changes to employees’ salaries in 2023. While more than half – 54 per cent – raised salaries in 2023, reflecting sustained demand for talent in the UAE.

Approximately 8 per cent of firms increased wages by more than 10 per cent, suggesting that talent retention has been a priority within certain sectors.

Bonus

The survey revealed that almost three-quarters – 71 per cent – of companies plan to issue annual bonuses based on their organisation’s financial performance in 2023, compared to 29 per cent having no such plans.

The largest proportion of firms (35 per cent) that intend to issue bonuses expect to pay one month’s basic salary. Almost a fifth (17 per cent) will pay two months’ salary, 12 per cent said three months, 4 per cent said four months, and 1 per cent said five months.

Employees working in the fields of accounting, chemicals, consumer goods, and hospital and healthcare can look forward to bonuses amounting to a generous six months’ basic salary, it said.

Companies that don’t intend to pay bonuses are financial services, consulting and IT industries.

“While salaries continue to play a crucial role in talent retention, factors beyond fixed remuneration – such as annual bonuses and the ability to work remotely – are playing an increasingly important role in the UAE’s job market,” said Jack Khabbaz, managing partner and CEO of public sector advisory at Cooper Fitch.

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