UAE salaries expected to increase 5% next year

UAE workers can expect a payrise according to this year’s Global Salary Increase Survey conducted by the human resources firm Aon Hewitt. Silvia Razgova / The National

Salaries in the UAE are expected to grow at a rate of 5 per cent next year, according to this year’s Global Salary Increase Survey conducted by the human resources firm Aon Hewitt.

Forecasts made for this year and 2012 were 5.1 per cent and 5.2 per cent respectively. This indicates economic stability and a continued confidence in the country’s business environment among organisations in the UAE, Aon Hewitt said.

The annual report allows companies to compare their own forecasts with those of the wider market, helping them to remain competitive.

Pay increases were found to be linked to employee performance with figures showing that a 7.2 per cent salary increase was given for those "far exceeding expectations" compared to a 0.1 per cent salary increase for employees that "did not meet expectations".

“While linking individual performance to pay is not uncommon, we advise employers to use annual bonus payments as the larger component for rewarding high performers,” Robert Richter, the compensation survey manager at Aon Hewitt Middle East, said.

“Salary increases typically take into consideration a number of other factors as well as performance, including inflation, rises to reflect promotions, and the need to ensure that employees at the same grade remain within a single pay band.”

Across the Arabian Gulf states, companies predicted an average salary increase of 5.5 per cent next year, matching forecasts made for 2012 and 2013.

Five-hundred companies from the Middle East, including 180 from the UAE, took part in the survey.