UAE workers have something good to look forward to next year as companies across the country are expected to grant salary increases of around five per cent in 2014.
In the latest Global Salary Increase Survey by Aon Hewitt, all the 180 organisations included in the UAE predicted an average pay adjustment of five per cent for 2014.
The adjustments are not across the board and can vary from one sector to another. Higher rates are expected for the pharmaceutical, oil and gas and financial services, while the hi-tech, retail and professional services sector might get less.
“There are some organisation which would generally offer more whereas some organisations offer less, but the majority is around the five per cent mark,” said Robert Richter, compensation survey manager at Aon Hewitt Middle East.
“What is important to keep in mind is that we are only talking about budgets. When it comes to the distribution of the increase, it does not mean that every employee will receive a five per cent increase. The actual increase will very often be determined by individual performance and positioning in pay band,” Richter told Gulf News.
The five per cent forecast is in line with the estimates for 2013 and 2012, which were 5.1 per cent and 5.2 per cent respectively. While Hewitt’s survey results indicate that the economy has improved and businesses are upbeat about the business environment, the main driver for higher salary budgets is the desire to retain or attract talent.
“Salary increases are always an indicator of the general state of the economy and how companies see the business environment in the near future,” said Richter. The main macroeconomic indicators in the country are currently on a positive trajectory, while inflation is relatively modest.
“A good economy will lead to enhanced recruitment and fierce competition for talent among organisations, hence it is important that salaries remain competitive. Actually our survey shows that the main reason for salary increases is not inflation or organisational performance but the desire to be or remain an attractive employer,” he added.
However, other sources said it is too early to make predictions about the job market in 2014, as it’s not yet known whether Dubai will win its bid for Expo 2020, which is expected to generate more employment opportunities. “By what percentage salaries will increase and which industries and job profiles will be effected can be predicted once we know if the Expo 2020 will be hosted in the UAE, “ said Annalinde Nickisch, HR consultant at The Thought Factory.
Aon Hewitt has been conducting the global survey every year for 36 years now, though it launched in the Middle East in 2009.
The study also found that in terms of distribution of pay adjustments, there is a clear correlation between performance and salary increases. Aon
Hewitt’s survey included 500 organisations across the Middle East. Across the GCC, companies are predicting an average salary increase of 5.5 per cent. Those based in Saudi Arabia gave the highest forecast for 2014 at six per cent.