More businesses in the UAE and the rest of the GCC region are expected to deliver salary increases this year, as organisations continue to invest in human capital to support growth amid an improving economic outlook. 

More than half (51%) of employees in the region received a salary bump in 2022, up from 43% in 2021, according to a new report released on Tuesday by Hays Middle East. 

In 2023, more workers could benefit from wage adjustments, with 74% of employers in the UAE expecting salaries within their organisation to increase this year.  

“Looking ahead, we’re predicting further salary increases for employees,” Hays said. 

The recruitment specialist compiled salary data for more than 400 roles across 13 industries in the region and looked into the latest workforce trends based on expert insights and the analysis of more than 2,000 companies and workers. 

Overall, Hays expect the labour market to remain buoyant this year, citing that despite global disruptions including the war in Ukraine, energy shortage and soaring inflation, the GCC region continued to show its resilience. 

“Despite serious global disruptions… the GCC remained steadfast and continued to invest and grow. It’s now the region with one of, if not the most, positive economic outlooks for the coming years,” wrote Sarah Dixon, Managing Director at Hays Middle East, in the report. 

“This is positive news for jobseekers and a challenge for employers looking to attract and retain top talent,” she noted. 

Salary increases 

As for salary adjustments, Hays found that the most common rate of increases given last year was 5%. Most of the adjustments were based on individual performance. 

Around 71% of workers in the manufacturing, procurement and supply chain sector enjoyed a salary increase. The highest pay hike in the industry was reported in Saudi Arabia, where most workers enjoyed increases of 20% or more. 

Increases this year are most likely to be almost the same as last year, with 74% of employers polled by Hays saying that they expect wages to go up by 5% or less. 

When asked what they consider when adjusting workers’ compensation, 70% of the employers cited individual performance. 

“With organisations in the region focusing predominantly on increasing operating profit and turnover, and gaining market share, tying compensation to job performance can boost employee motivation, effort and commitment to the company,” the report said. 

The International Monetary Fund (IMF) expected the UAE GDP growth to reach more than 6% in 2022, up from 3.8% in 2021. Inflation in the country was expected to average more than 5% in the same year. 

(Reporting by Cleofe Maceda; editing by Anoop Menon)