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Salaries are Projected to Outpace Cost of Living in 2024: UAE Job Market Report

Thanks to increased demand for talent and growth in the overall economy

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Staff Writer, TLR

Published on March 27, 2024, 11:38:00

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Salaries projected increase faster inflation rate hike

Salaries are projected to increase faster than the inflation rate hike in the UAE this year on the back of increased demand for talent and growth in the overall economy.

According to global human capital consultancy Mercer, the average salary in the UAE is expected to increase four per cent this year as compared to a 2.3 per cent rise in inflation.

The Mercer Middle East Total Remuneration Survey for 2024 revealed employees working in energy companies will see a slightly higher salary increase of 4.3 per cent this year and staff in consumer goods firms will on average see a 4.1 per cent hike.

Life sciences and high-tech companies plan to hike salaries by around four per cent. In 2023, average salaries increased by 4.1 per cent across all industries in the UAE.

Andrew El Zein, principal for Careers in Mena region, said although there is stability, growth and excitement in the UAE job market, one of the big issues is the cost of living, mainly due 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 definitely going to be a concern and going to feel on the employees’ pocket,” he said.

Rents in the UAE have been consistently on the rise after the pandemic due to the increased flow of foreign workers into the country. Despite the rising costs, El Zein said, the UAE has a lot of potential and opportunities, especially 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.

To retain talent, he said there is a lot of work and queries regarding different types of long-term and short-term incentives and other forms of retention plans to retain critical talent.

Regarding Emiratisation, he added that there is a huge competition between private sector organisations to attract this workforce. “There is still a large untapped workforce in the Emirati women segment.”

The Mercer Middle East Total Remuneration Survey for 2024 revealed that 16.3 per cent of UAE firms plan to increase their headcounts while 7.8 per cent intend to cut workforce this year.

Around 75.9 per cent of companies in the Emirates neither plan to add or reduce their workforce. The study, which covered the Middle East region, found that the entire GCC region will see salaries outpacing inflation this year while the wider region is struggling to keep pace with the oil-rich Gulf states.

In addition, 3.8 per cent of firms in the UAE expect an increase in turnover rate for 2024 and 11.4 per cent see a decrease.

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