Costs are rising, but for many professionals in the UAE, wages this year might remain largely stagnant. Salary increases are expected to be selective rather than universal amid an influx of talent, according to recruiters.
Most employees are likely to see modest increases, while critical roles and high performers will receive targeted adjustments, says Mahesh Shahdadpuri, founder and chief executive of TASC Outsourcing.
Companies are balancing increasing costs with the need to retain key talent, making rises increasingly performance and value-driven, he adds.
“2026 won’t be a year of across-the-board salary hikes, but most companies will increase pay selectively,” says Aws Ismail, director of recruitment at outsourcing and training provider Marc Ellis.
“High performers and hard-to-replace roles will see movement, while average performers may see smaller or no increases.”
The introduction of artificial intelligence in many teams has allowed businesses to reduce employee workload. That means workers need to add much more value to be noticed and considered for pay rises, Mr Ismail says. Although cost control is still a factor, retention pressure is very real, he adds.
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An average salary rise of 1.6 per cent is expected in the UAE this year, with the expanding workforce moderating pay rises, recruitment consultancy Cooper Fitch states in its UAE Salary Guide 2026.
For 2026, 48 per cent of companies polled by Cooper Fitch plan to increase salary ranges, while 37 per cent expect to keep them flat and 15 per cent anticipate offering lower ranges for new hires.
Most planned rises sit in the 0 per cent to 5 per cent band, with only a small number of firms budgeting 6 per cent to 9 per cent or double-digit increases for hard-to-replace roles in areas such as technology, transformation and specialised finance, the Salary Guide states.
The talent market is “neither overheating nor weakening”. Employers are rewarding performance and critical skills, but the “era of aggressive salary growth” has clearly cooled, the report finds.
As population growth, tightening margins and increased labour market mobility reshape hiring power, organisations are shifting towards targeted increases rather than across-the-board uplifts, marking a new phase in UAE compensation strategy, the study says.
Which industries will receive highest pay rises?
Technology, financial services, health care and energy are expected to lead salary growth in the UAE this year, Mr Shahdadpuri explains.
“These sectors are either growing fast, heavily regulated or struggling to find experienced talent, which naturally pushes salaries up,” according to Mr Ismail.
“2026 is going to be about targeted rewards, and companies are investing in the people they can truly depend on.”
Roles in AI, data analytics, cyber security, finance, compliance and specialised engineering are in high demand and short supply, prompting employers to offer premium compensation to attract and retain these professionals.
Skills most in demand
Employers are increasingly clear that future talent shortages will be role-specific, rather than sector-wide, the Cooper Fitch guide states.
Roles tied to business transformation, digitisation and strategy are harder to fill, while most operational and customer-facing positions face fewer constraints. Organisations undergoing restructuring or technological change are the most likely to report difficulty finding the right skills, the research shows.
AI, data, cyber security, cloud and strong commercial sales skills are sought-after. Employers want people who can deliver results quickly, says Waleed Anwar, managing director of Dubai recruitment company Upfront HR.
Mr Shahdadpuri says that digital and technology skills dominate the market. Equally important are strategic thinking, project leadership, regulatory expertise and adaptability.
“Candidates with UAE experience continue to command a premium, particularly at mid to senior-level roles,” he says.
“Familiarity with local regulations, business culture and market dynamics reduces onboarding risk and allows employees to contribute immediately. For highly specialised roles, international experience combined with niche expertise can also be highly valued.”
Will companies pay bonuses in 2026?
Bonuses are still on the table, especially in banking, consulting, tech and health care, according to Mr Ismail.
For most roles, bonuses tend to range between one to three months’ salary, with higher payouts reserved for senior or revenue-generating positions, he says.
Mr Shahdadpuri agrees that banking, financial services, energy, real estate and technology will offer the highest bonuses in the UAE this year.
“Bonuses will be more performance-driven. Financial services, FinTech, sales and trading roles will pay the highest, typically 10 per cent to 40 per cent of annual basic salary based on results,” Mr Anwar says.
Benefits beyond salaries
For most employees in the UAE, salary is the top driver, but work-life balance and career growth are becoming just as important, according to the Cooper Fitch Salary Guide.
Compensation structures are evolving beyond fixed salaries, according to Mr Shahdadpuri. Employers increasingly offer performance-linked incentives, retention bonuses, hybrid or flexible working options, enhanced health coverage, wellness initiatives, and learning and development budgets.
Total rewards are becoming as important as base pay in attracting and retaining talent, he explains.
Jobs for graduates
In the UAE, fresh graduates are entering a labour market where AI adoption is moving faster than in many global economies. Tasks that once defined entry-level roles, basic analysis, reporting and co-ordination are increasingly automated. As a result, employers are looking for graduates who can work with AI from day one, not compete against it, Mr Shahdadpuri explains.
“The challenge is less about job availability and more about readiness. Graduates with applied digital skills, exposure to real work environments, and the ability to use AI as a productivity tool are far better positioned in today’s UAE job market,” he says.
New joiners in some organisations are likely to come in on leaner packages than in previous years, according to the Cooper Fitch report.
“In some cases, compensation expectations are adjusting as AI improves productivity and reshapes role design across the UAE. Employers are increasingly pricing roles based on value creation rather than hours or hierarchy,” Mr Shahdadpuri says.
“However, this shift is also being offset by faster career progression, structured upskilling and greater exposure to high-impact work.”
Role of middle managers
Middle management roles in the UAE are not disappearing, but they are being reshaped by technology, Mr Shahdadpuri says.
“As organisations adopt AI, analytics and intelligent workflow systems, the need for traditional supervisory layers is reducing,” he states. “Middle managers who add strategic and digital leadership value will remain essential.”
