UAE salaries to rise 4.6% in 2017, down from 4.9% in 2016

Salaries in the United Arab Emirates are set to rise by an average of 4.6 per cent in 2017, down from an average increase of 4.9 per cent this year, according to a new report from advisory firm Willis Towers Watson.

The reduction in the pay hike is a result of the shifting economic conditions globally and regionally, that has impacted pay and benefits, explained senior consultant and Data Services lead for the Middle East at Willis Towers Watson Laurent Leclère.

“With the drop in oil prices, the region has diversified its economy to reduce its dependence on oil. On the other hand, the region continues to demonstrate great stability in continuing to develop other verticals such as tourism, hospitality and education,” he said.

The projected wage hike in the UAE – applicable across all industry sectors – also remains higher than the inflation rate, which has stayed at around 4 per cent in the past two years, the report found.

Also read: Almost 50% of UAE workers didn’t get a pay hike in 2015

Looking wider at the Gulf states, employees in Bahrain will see a similar pay increase of 4.6 per cent.

However, Saudi Arabia and Kuwait (at 5 per cent) and Qatar (at 4.8 per cent) are projected to see higher salary increases.

Lebanon will have the highest increase in the wider region at 5.4 per cent, the report added.

Senior consultant and Data Services lead for the Middle East at Willis Towers Watson Laurent Leclère said: “There are many factors that affect the employee attraction and retention such as the work environment, the managers they work with and health and insurance programmes.

“The top-most factor however is the compensation that would also drive the employees’ performance.”

Also read: Revealed: Top 10 salaries in the UAE

On a global level, the report found that employees in Asian countries can expect some of the highest pay rises with a regional average real-pay increase of 3.8 per cent, followed by the Europe, Middle East and Africa region at 1.9 per cent and Latin America at 1.8 per cent.

North America has the lowest projected increase at an average of 1.6 per cent.

Overall, the report also found that pay growth could be higher for certain skilled jobs with a smaller talent pool such as digital professionals.

“In an increasingly global and fast-moving talent market, effective use of the company’s salary budget should be high on reward professionals’ agendas,” said Leclère.

“Identifying key talent, for not only technical skilled roles but also for the skills necessary for succession planning, is essential to the long-term health of any company.

“By segmenting and differentiating to meet organisational and employee needs it is possible to ensure companies are offering a total rewards packages that employees value and that will better its chances of retaining and engaging top talent,” he added.