Salaries in the UAE are projected to see minimal growth in 2025, with increases expected to remain in the low single digits or stagnant, according to recruitment consultants. Experts attribute this trend to the continued influx of skilled expatriates and already high salary levels in the region.

Trefor Murphy, CEO of recruitment firm Cooper Fitch, highlighted that the UAE offers competitive, tax-free salaries compared to cities like London or New York, but this has driven up business costs. He noted that companies may struggle to maintain above-market wages while staying competitive.

HR consulting firm Mercer predicts a 4% average salary hike next year based on a survey of over 700 companies. However, its UAE career products leader, Andrew El Zein, expressed concerns over growing pay disparities between new hires and existing employees, which could challenge workforce retention.

The hiring outlook for 2025 appears steady, with no major shifts anticipated, according to Tiger Recruitment’s Zahra Clark. While there is strong demand for skilled talent in high-growth sectors, the large pool of expatriates willing to accept lower salaries may lead to wage stagnation in certain roles.

Mercer’s survey also revealed that over 28% of UAE companies plan to increase their workforce next year. However, sectors like sales, IT, engineering, and marketing are facing hiring challenges due to skill shortages.

Industries expected to see the highest salary increases include consumer goods (4.5%), life sciences (4.2%), and technology (4.1%), while retail and junior office roles may experience pay declines due to oversupply. According to Genie Recruitment’s Nicki Wilson, roles in areas like AI, digital marketing, and FinTech are likely to attract better pay due to rising demand for these skills.

As for bonuses, payouts will vary by industry and company performance. Experts predict bonuses ranging from 2% to 6% of annual salaries in most sectors, while high-growth industries like real estate and finance could offer up to 30% or more. Mercer’s El Zein added that short-term incentives, typically around 12% of total pay, remain a standard part of compensation packages in certain sectors.

To retain talent amid rising living costs, companies are exploring enhanced benefits. This includes housing allowances, flexible working options, and even wellness perks like health workshops or “duvet days.” Tiger Recruitment noted that some firms are also offering remote work opportunities for up to a month or continuing annual flight allowances for expatriates.

Flexible working hours are becoming more popular, supported by government initiatives to promote work-life balance. Additionally, Mercer predicts a growing focus on training employees in areas like AI to help them stay competitive in an evolving job market.

Source: TheNational