Average salary hikes in the UAE for 2013 will lag behind those of other Gulf countries, a new research report by consultants Aon Hewitt has revealed.
Wages in the UAE are expected to rise 5.1% compared to a GCC-wide increase of 5.4%. A salary increase of 6.08% is projected in 2013 for the wider Middle East.
Bank employees in the UAE will see the largest rise, with wages set to increase by 8.1% next year, compared to a 2.5% rise in the transportation, logistics and shipping sector.
The majority of organisations in the UAE will award salary increases based on employee performance, with pharmaceutical and chemical sectors offering a 5.8% increase, while the machinery and equipment sector will award only a 4.1% increase, the Aon Hewitt survey said.
Martin McGuigan, Head of Reward Consulting, Aon Hewitt Middle East said: “All macro-indicators have shown that the economic scenario continues to move in a positive direction with corporates continuing to show confidence in the 2013 economic outlook.”
"There are no further reductions in the salary increase projections for the next year which is good news for employees. We have also observed that organisations have increasingly been linking salary increases to performance, which is a healthy trend and indicates the increasing maturity level of the market," he added.
Salary freeze
The report also highlights that fewer organisations in the Middle East are thinking about salary freezes.
Only 1.3% of organisations in UAE have projected a salary freeze in 2013 compared to 4.1% in 2012.
The major exception to this trend is Qatar, where at least 8% of organisations have projected a salary freeze in 2013 against 2.4% who froze salaries during 2012.
This may be attributed to the high salary increase given to Qatari national employees in 2011, with organisations now trying to induce market competitiveness to normalise the impact, the report said.
The Aon Hewitt survey polled more than 500 companies from 26 sectors in the Middle East.
Country variations
| Country |
Anticipated salary rise in 2013 |
Actual salary rise in 2012 |
Change |
| Bahrain |
4.7% |
4.4% |
+0.3 |
| Egypt |
9.5% |
8.8% |
+0.7 |
| Jordan |
6.6% |
6.1% |
+0.5 |
| Kuwait |
5.8% |
6.2% |
-0.4 |
| Lebanon |
6.0% |
6.4% |
-0.4 |
| Oman |
5.6% |
5.4% |
+0.2 |
| Qatar |
5.6% |
5.6% |
No change |
| Saudi Arabia |
5.8% |
5.8% |
No change |
| UAE |
5.1% |
5.2% |
-0.1 |