Salary increases in UAE, Saudi and Qatar to overtake inflation rates

UAE employees in technology, energy and consumer goods sector would get the highest pay increases, Mercer says

By Deena Kamel Yousef, Staff Reporter
00:00 October 28, 2012

Dubai: Your wallet may just get heavier: Salaries in the UAE could rise by five per cent next year, with the highest raises expected in the energy, consumer goods and technology sectors, according to a recent survey.

A survey of about 500 companies in the Gulf across industries forecasts a five per cent rise in the UAE, 5.6 per cent in Qatar and six per cent in Saudi Arabia during 2013 — which will remain above the forecast inflation rates, according to the Total Remuneration Survey by global consultancy Mercer.

Companies will increase salaries in all levels of hierarchy because of competition to acquire and retain talent, Mercer said.

Multinationals operating in the UAE are paying up to 13 per cent more than local companies in terms of base salaries, according to Zaid Kamhawi, Mercer’s IPS Business Leader in the Middle East.

In the UAE, predicted pay hikes among executives are highest in the energy sector while those in managerial and lower positions will see the biggest payments in the consumer goods sector, the survey showed.

“The salary increases we anticipate in the region are higher than what we see in developing countries and above inflation,” said Kamhawi. “This is a clear reflection of the growth expected by Middle Eastern companies and an indication of their need to retain quality talent.”

Firms will be on aggressive recruitment mode, with 60 per cent of companies surveyed looking to hire by the end of the year and 70 per cent aiming to increase headcount by 2013, according to Mercer.

However companies are still cautious due to the impact of regional and global events on the local economy, Kamhawi said.


“Multinational firms, headquartered in Europe or the US and with Middle East operations, perceive the Mena region as a bright spot for investment and of their key growth regions,” Kamhawi added. “As a result of this, and as we tend to see in emerging markets, companies are competing to attract and retain valuable talent in the foreseeable future.”

Nationalisation efforts are seen across the UAE and Saudi Arabia, but Qatar showed a 10 per cent jump in the number of respondents reporting their firms are hiring nationals.

The GCC and particularly Dubai have benefited from the Arab Spring across Mena in terms of business picking up, which should translate into increased salaries next year, said David Fisher, chief executive of Grant Thornton Middle East, a business advisory firm.

“But with fairly quiet times in the rest of the world, people are looking to relocate from Europe to the UAE which could counter-balance that,” he added.

A generational shift which sees young people more concerned about career development and quality of life rather than only salary packages, means that money is a less effective way to retain staff, he said.