Overall salaries projected to increase by 4.8% in the UAE across all industries in 2019, with the strongest surge likely to come for those employed in non-energy industries.

Salaries across all sectors increased by 4.5% in 2018, with the highest increase in the life sciences industries (5%), according to Mercer, in its annual Total Remuneration Survey.

Other sectors that are expected to see strong increase include consumer goods and high-tech industries, with real wage growth (salary increase minus inflation rate) is also expected to steadily rise in the region.

The energy industry, which was previously the highest paying has now seen a downward shift. While it is projected to perform below the market, with an expected increase of 4%, it’s the highest increase rate seen since 2015 for the industry.

“The GCC is a market that is continuously progressing and thriving. With the UAE’s vision of diversifying away from oil, we’re seeing new trends in industries with regards to employee compensation, hiring and talent,” said Ted Raffoul, Career Products Leader, MENA at Mercer.

“Sectors such as the High Tech and Life Sciences industries have evolved due to the growing population and the need for digital transformation across the entire market, which is generating more employment opportunities and salary increases.”

Hiring boost

The overall hiring outlook in the UAE is positive with close to 50% of companies looking to increase their headcount and 45% looking to maintain headcount.

Additionally, 3% of companies have stated salary freezes in 2018 compared to 10% in 2016.

The survey also looked at pay parity (in terms of annual total cash) at different levels of management in the region. The ratio of salary difference rises steeply (up to 10 times) as employees reach senior level positions in the UAE, compared to the average of 5 times in developed markets.

This trend is commonly seen in emerging markets as talent scarcity plays a major role, and there are extremely high premiums to be gained by those people with the right skills. Most notably, the highest-ranking executives in the UAE out-earn their peers in the US and UK.

GCC talent trends

The survey also looked at talent trends in the region. It found that 78% of organisations expect an increase in competition for talent in the GCC. Furthermore, 47% of organisations noted that there aren’t enough experts in niche fields, and that scarcity of required talent may pose a potential challenge.

The reason for this trend could be due to the UAE’s diversification efforts which is giving rise to niche fields in specific industries like healthcare and IT, resulting in the need for specialized experts.

“53% of respondents placed labour nationalisation requirements as a top GCC economic and social issue that is likely to have an impact on organizations over the next two years,” said Maxime Jallageas, Associate at Mercer.

“This will have a clear and direct impact on the hiring trends firms will adopt, particularly on the reward mechanisms that are put in place to attract local talent. Packages offered and opportunities for advancement will need to compete with those offered in the public sector.”

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