Salaries in the UAE are forecast to rise by an average of 4.8 percent this year, according to the latest update to Aon Hewitt's annual Middle East Salary Increase Survey.
The increase compared to an average rise of 5.2 percent last year, the global human resources company said.
The report also revealed that no participating UAE firms were planning a hiring freeze in 2013.
It showed that 97.2 percent of UAE companies surveyed have ruled out making any redundancies in 2013 while 41 percent are looking to increase recruitment this year compared to 2012.
Data from the survey confirmed that the average salary increase across all sectors in the UAE in 2012 was consistent with levels predicted by participating organisations during 2011.
The winter update showed that the 50-plus UAE companies surveyed revised their forecast of average salary increases during 2013 from 5.1 percent to 4.8 percent.
"The results indicate an underlining stability in the market with relatively consistent rates of increase and overall growth in salaries year-on-year," Aon Hewitt said in a statement.
It added that while most UAE firms based salary increases on market competitiveness others reported that business performance, inflation and consumer prices also influenced decisions.
Martin McGuigan, head of reward consulting at Aon Hewitt Middle East, said: “We continue to see a growing trend towards performance-based pay.
"It is to be expected that merit-based pay will become more prevalent as the UAE employment market continues to mature, giving organisations a means of capping their pay budget in accordance with business performance.”
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