A report published on December 20 revealed that several companies in the UAE are preparing to raise salaries of employees in 2024. Salaries are expected to increase by 4.5 per cent on the back of strong performance of the non-oil sectors, especially real estate.

The ‘Salary Guide UAE 2024’ report released by Cooper Fitch said majority – 53 per cent – of firms expect to increase their employees’ salaries next year. Detailed breakdowns show that more than one-third, that is 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. In contrast, more than one-fifth – 21 per cent – firms expect to lower salaries in 2024, which is surprising especially with the increased demand for the best talent. More than a quarter have no plans to revise their employees’ wages during the coming year.

The Cooper Fitch survey found that more than four-fifths – 81 per cent – firms either increased or made no changes to employees’ salaries in 2023. At the same time, more than half – 54 per cent – raised salaries in 2023, reflecting a sustained demand for talent in the UAE. Approximately 8 per cent of firms increased wages by more than 10 per cent. This suggests that talent retention has been a priority within certain sectors.

Despite a moderation of the UAE economic growth to around 3 per cent this year from last year’s 7.9 per cent, it is the non-oil sectors like real estate, travel, tourism, and aviation that are expected to drive growth.

The report also spoke about trends in bonuses. The survey revealed that almost 71 per cent of companies plan to issue annual bonuses, with 29 per cent having no such plans. As many as 35 per cent intend to issue 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 accounting, chemicals, consumer goods, and hospital and healthcare fields can look forward to a generous six months bonuses, the report 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.