'Era of aggressive salary growth has cooled': UAE wages set to increase by 1.6% in 2026

Companies are moving towards targeted wage increases rather than across-the-board uplifts, Cooper Fitch report says

General and mid-level roles in the UAE remain well supplied, supported by ongoing population inflows, according to a new Cooper Fitch report. Alamy

Salaries in the UAE are expected to rise by 1.6 per cent on average in 2026, as companies move towards focused increases amid strong population growth, according to a report by recruitment consultancy Cooper Fitch.

Most planned salary increases sit in the 0 per cent to 5 per cent band, with only a small share of companies budgeting 6 per cent to 9 per cent or double-digit raises for “hard-to-replace roles” in areas such as technology, transformation and specialised finance, the UAE Salary Guide 2026 report said.

The study polled business leaders across 800 organisations in the UAE.

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There was an average salary increase of 2.6 per cent in the Emirates this year, figures compiled from employers show. Most organisations remained conservative, with 38 per cent approving modest increases of zero to 5 per cent to secure specialist or business-critical talent in “a competitive market”.

“New joiners that don't have UAE or Gulf experience are likely to come in on leaner packages,” said Trefor Murphy, founder and chief executive of Cooper Fitch.

“But individual contributors stand out in 2026, with 14.3 per cent expected to receive mid-range salary increases of 6 per cent to 9 per cent, almost triple the rate seen in leadership or management levels, pointing to rising competition for specialised operational talent. They missed out on salary increases in the last couple of years.”

The UAE’s population is booming, with both Abu Dhabi and Dubai passing the four-million mark this year.

The Emirates is also facing a surplus of skilled professionals in many roles, particularly at middle and senior management levels, according to recruitment experts. The country’s attractive lifestyle and tax-free salaries continue to draw skilled professionals from around the world.

Eighty-four per cent of employers polled expect to either increase or maintain salary levels in 2026. However, the “era of aggressive salary growth” has cooled, Cooper Fitch reported. As population growth, tightening margins and increased labour market mobility reshape hiring power, organisations are shifting towards focused increases rather than across-the-board adjustment, the report said.

A majority of organisations (63 per cent) believe the UAE has sufficient talent to meet their hiring needs in 2026, while 19 per cent cite continued shortages in securing the skills required, the report revealed.

Positions in demand

“General and mid-level roles remain well-supplied, supported by ongoing population inflows. Specialist and leadership positions are becoming increasingly competitive, particularly where employers require sector-specific expertise or transformation capabilities,” Cooper Fitch said.

“Roles tied to business transformation, digitisation and strategy are harder to fill, while most operational and customer-facing positions face fewer constraints. Supply is strong at the middle of the pyramid. Still, pressure is building at the top.”

Nearly half of employers (48 per cent) expect to increase staffing next year as companies respond to economic activity. About a third (29 per cent) anticipate headcount reduction, the report said.

New joiners that don't have UAE or Gulf experience are likely to come in on leaner packages

Trefor Murphy,
founder and chief executive, Cooper Fitch

Aviation, defence and aerospace have some of the strongest expansion signs, with nearly half of companies polled reporting expectations of double-digit growth in headcount next year. Public sector organisations also anticipate significant increases, the consultancy found.

A significant number of real estate and construction companies expect to carry out substantial hiring, while others anticipate sharp reductions, reflecting the sector’s exposure to shifting project cycles, according to Cooper Fitch's findings.

The sector continues to benefit from sustained development activity across residential, commercial and mixed-use projects, supported by strong investor demand and a growing population.

Multiyear construction pipelines, major infrastructure programmes and continuing private-sector investment have driven demand for talent linked to project delivery, development management, advisory services and real estate operations, the study said.