Salaries in UAE are projected to rise: Mercer

By Eudore R. Chand

DUBAI 17 October 2019: Projected salary increases in the UAE signal optimistic outlook for 2020, according to Mercer.

It said overall salaries are projected to increase by 4.5% in the UAE across industries in 2020.

It pointed out that the UAE has one of the lowest unemployment rates among fellow GCC countries and voluntary turnover has increased to more than 7%, signifying a more active job market.

Mercer is a global consulting leader in advancing health, wealth and careers. Its annual Total Remuneration Survey (TRS) researched over 500 companies in the UAE.

The highest annual salary increase is forecasted in the life sciences industries at 4.6%. While forecasts vary across specific industries, the strongest push is likely to come from the life sciences and high-tech industries. The energy industry continues to see some of the lowest increase in salaries with a projected 3.7% increase in 2020, compared to a 3.6% increase in 2019. Notably, companies are providing higher increases to executives and managers than they are to other employee levels, signalling increased attention to leadership skills.

Ted Raffoul, Career Products Leader, Mena at Mercer said: “It is very encouraging to see that a large segment of UAE employers are looking to increase salaries in 2020. This is a reflection of a resilient and optimistic economy. The UAE is constantly looking at new approaches to progress and develop the workforce further. In addition to annual increases in base salary, UAE companies are also making progress in regards to long-term incentives. The recent introduction of enhanced employee benefits in DIFC, for example, will help companies attract and retain the valuable talent needed to advance and transform different sectors in the region.”

Positive Impact

Overall, inflation and unemployment rates in the UAE have continued to gradually decrease overtime. This signals a positive impact to the country’s GDP growth, which is forecasted to steadily increase in the coming year. Furthermore, voluntary turnover rate has increased to more than 7% in 2019, an increase from almost 5% in 2017, representing growth over three consecutive years. The overall hiring outlook in the UAE is also positive with 45% of respondents planning to increase their headcount and 52% looking to maintain headcount in 2020.

The survey also looked at pay parity between men and women across different industries in the region. According to the survey there is a lack of women in senior management positions and STEM roles.

Women:Men Ratio

“The low ratio of women in leading roles across the UAE is concerning, especially because the current roles predominantly held by women will eventually become obsolete due to the increase in automation among various sectors. In contrast STEM roles are expected to grow at the fastest rate, but women are underrepresented in these careers paths. However, in line with the UAE Vision 2021, the country is quickly combatting this issue. For instance, the government established the UAE Gender Balance Council to ensure that Emirati women continue to play a key role in the development of the country. That being said, it is an important responsibility for both the public and private sector to ensure an effective gender balance. Ensuring more opportunities for women in the workplace, especially in senior roles, has been proven to help organizations perform better than their less inclusive peers and will benefit the overall economy,” added Raffoul.

The TRS was launched regionally in 18 countries across the Middle East and North Africa region. In the UAE specifically, more than 500 organizations were surveyed in the manufacturing, retail and wholesale, services, chemicals, life sciences, high tech, energy, and other industries.