UAE salaries set to rise in 2024
Salaries in the UAE are expected to rise by 4.5% this year on the back of strong performance of non-oil sectors, especially real estate, according to a new report from leading recruitment agency Cooper Fitch.
Its newly-published ‘Salary Guide UAE 2024’ report said the majority (53%) of firms expected to increase their employees’ salaries in the coming 12 months. More than one-third (39%) plan to raise wages by up to 5%; almost one in 10 by 6%–9%; and one in 20 is looking to increase salaries by 10% or more.
However, more than one-fifth (21%) of firms expect to lower salaries in 2024, while more than a quarter have no plans to revise their employees’ wages during the coming year, Cooper Fitch said.
It also said that more than four-fifths (81%) of companies either increased or made no changes to employees’ salaries in 2023. More than half (54%) raised salaries in 2023, reflecting the demand for talent in the UAE.
Some 8% of firms increased wages by more than 10%, suggesting that talent retention has been a priority within certain sectors.
The survey also showed that almost three-quarters (71%) of companies plan to issue annual bonuses based on their organisation’s financial performance in 2023 – 29% have no such plans.
The largest proportion of firms (35%) that intend to issue bonuses expect to pay one month’s basic salary. Almost a fifth (17%) will pay two months’ salary, 12% said three months, 4% said four months, and 1% said five months’ salary.
Employees working in accounting, chemicals, consumer goods, and hospital and healthcare can look forward to bonuses amounting to a generous six months’ basic salary, it said.
Companies that don’t intend to pay bonuses are financial services, consulting and IT industries.
“While salaries continue to play a crucial role in talent retention, factors beyond fixed remuneration – such as annual bonuses and the ability to work remotely – are playing an increasingly important role in the UAE’s job market,” said Jack Khabbaz, managing partner and CEO of public sector advisory at Cooper Fitch.
The UAE’s economic growth will moderate to nearly 3% this year as compared to last year’s 7.9%. Among non-oil sectors, real estate, travel and tourism and aviation will continue to lead the UAE’s economic growth.
UAE joins BRICS trade bloc
The United Arab Emirates, along with Saudi Arabia, Egypt, Iran and Ethiopia officially joined BRICS on 1 January 2024, bringing the group’s membership to 10. They join Brazil, Russia, India, China and South Africa, the organisation’s founding members.
Analysts say that the BRICS bloc’s expansion to include the UAE and Saudi Arabia will provide fresh investment opportunities for the Arab world’s two largest economies while increasing the group’s global influence.
Speaking to the Mint website, Ullas Rao, assistant professor of finance at Heriot-Watt University in Dubai, said that the fact both the UAE and Saudi Arabia are home to the biggest sovereign wealth funds “augurs extremely well amid ongoing geopolitical and economic challenges confronting the world economy”.
The UAE is also establishing trade agreements to boost connections with neighbouring countries and is trying to negotiate 26 comprehensive economic cooperation agreements, Mint reported.
Gary Dugan, chief investment officer at Dalma Capital, said that whereas BRICS had the image of a “financially vulnerable group”, the economic might of the UAE “as net exporters of capital to the rest of the world will substantially change that perception”.
He said” “Also as a collective, we expect Saudi Arabia and the UAE to be afforded easier access to the growth markets of the BRICS countries on favourable terms.”
Ehsan Khoman, head of ESG, commodities and emerging markets research at MUFG, believes the two nations will “reinforce their bargaining power and influence in Opec+ while also offering the space for them to align their strategies with other BRICS members”.
China and India, two BRICS members, are the world's second and third largest consumers of oil, with substantial energy links to the Gulf nations.
