UAE salaries set to rise 5.1% next year - report

Average salaries in the UAE are expected to rise 5.1 percent in 2013 compared to a Gulf-wide increase of 5.4 percent, according to a new study by consultants Aon Hewitt.

Employees working for banks in the Gulf state will see the largest rise with wages set to increase 8.1 percent next year compared to a 2.5 percent rise in the transportation, logistics and shipping sector.

“All macro-indicators have shown that the economic scenario continues to move in a positive direction with corporates continuing to show confidence in the 2013 economic outlook,” Martin McGuigan, head of reward consulting at Aon Hewitt Middle East said.

“At large, there are no further reductions in the salary increase projections for the next year which is good news for employees.

“We have also observed that organisations have increasingly been linking salary increases to performance, which is a healthy trend and indicates the increasing maturity level of the market,” he added.

The GCC’s combined GDP growth is expected to increase 5.5 percent this year and 3.7 percent in 2013, according to the International Monetary Fund.

Strong economic growth coupled with rising oil prices means less companies operating in the region are likely to freeze salaries, said Aon Hewitt. Only 1.3 percent of firms in the UAE have projected a pay freeze next year compared to 4.1 percent last year.

The major exception to the trend is Qatar where at least 8 percent of firms said they anticipated salaries to stay flat compared to 2.4 percent last year.

“This may be attributed to the high salary increase given to Qatari national employees in 2011, with organisations now trying to induce market competitiveness to normalise the impact,” noted the report.

The survey, which polled more than 500 companies, said average salaries across nine countries in the Middle East would increase 6.08 percent, the same projections made in 2011 for this year.