Overall salaries in the UAE are projected to increase by 4% across all industries in 2025 and that more than a quarter (28.2%) of organisations are planning to increase headcount next year, according to a survey.

 

Companies in the consumer goods industry are forecasting the highest increase to salaries at 4.5%, said Mercer in its annual Total Remuneration Survey (TRS). The life sciences and technology industries are forecasting increases of 4.2% and 4.1%, respectively, while the energy and financial services sectors are aligned to the market with 4% increases. Employers across industries also said they plan to provide all employees, regardless of level, the same salary increases. 

 

More than 700 companies in the UAE were surveyed in a range of industries including energy, financial services, engineering, construction, real estate, manufacturing, retail and wholesale, services, life sciences and technology. 

 

Optimistic outlook

tlook“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,” said Andrew El Zein, Mercer’s UAE Career Products Leader. 

 

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% 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, added: “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.”

 

New technologies

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.--TradeArabia News Service