UAE salaries are projected to increase by 4 per cent across all industries in 2025 and that more than a quarter (28.2 per cent) of organisations are planning to increase headcount next year, according to Mercer’s annual Total Remuneration Survey (TRS).
The Marsh McLennan-backed consultancy surveyed more than 700 companies in the UAE in a range of industries including:
- Energy
- Financial services
- Engineering
- Construction
- Real estate
- Manufacturing
- Retail and wholesale
- Services
- Life sciences
- Technology
UAE pay rises
Companies in the consumer goods industry are forecasting the highest increase to salaries at 4.5 per cent. The life sciences and technology industries are forecasting increases of 4.2 per cent and 4.1 per cent, respectively, while the energy and financial services sectors are aligned to the market with 4 per cent increases.
Employers across industries also said they plan to provide all employees, regardless of level, the same salary increases.
Andrew El Zein, Mercer’s UAE Career Products Leader said: “It is very encouraging to see a large segment of UAE employers planning to increase base salaries in 2025, reflecting a resilient and optimistic economic outlook.
“In addition to increasing salaries, HR professionals should also review their housing allowances, in light of increasing housing costs in the country, to remain competitive”.
Mercer’s survey also explored the impact that Generative AI, automation and digital transformation are having on the demand for skilled talent.
Currently the UAE has the highest AI adoption rates in the Middle East, with 74 per cent of people using AI once a week, and CEOs in the UAE expect AI to be a top driver for future growth, according to Mercer’s Global Talent Trends.
Ted Raffoul, Mercer’s Middle East Career Products Leader, said: “Generative AI and automation are rapidly transforming the job landscape, shifting the skills our workforce needs and placing additional pressure on salaries.
“Business leaders play an important role in nurturing digital literacy and cultures that are open to change, so employees at all levels can be prepared for the future of work.”
To address the adoption of new technologies, Mercer recommends employers assess their current skill inventories to pinpoint gaps and areas for development.
They should also gain a better understanding of hiring and retention drivers to ensure they have the skills they need for the future. Developing a differentiated Employee Value Proposition (EVP) will also be crucial in this new reality.
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