As the UAE gears up for significant economic growth in 2024 and 2025, new insights indicate an increasing disparity in salary trends across various sectors.
Recent analyses show that industries such as Finance, Banking, and Fintech are leading the way, with average salaries 24% higher than the market median. Following closely is the Energy and Utilities sector, where wages exceed the median by 20%.
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According to Vijay Gandhi, regional director of Korn Ferry Digital for EMEA, the Technology and Innovation sector—especially in fields like artificial intelligence, data science, and cybersecurity—also offers competitive salaries. “Although the Transport sector is less pronounced, it still registers 4% above the median,” he noted.
Conversely, several fields lag significantly behind the national average pay. Employees in tourism and hospitality earn 19% less than the median, with construction workers receiving 13% below, and those in trade, retail, and consumer services earning 11% less. Life sciences professions and real estate come in at 8% and 5% below the average, respectively.
Wage growth remains modest amid inflation
Despite rising living costs, salary increments across the UAE have generally been modest, averaging just 4 to 5% in recent years. This trend reflects a global phenomenon, as a Korn Ferry survey indicates many organizations are opting out of salary hikes for most employees and instead are focusing rewards on pivotal roles.
The report suggests, “Current reward programs must be more dynamic, inclusive, and aligned with both business objectives and employee expectations.”
Amid the need to retain talent within limited compensation budgets, UAE companies are broadening their approach beyond conventional salary structures. A growing number of employers are embracing comprehensive “Total Rewards” models.
These models include financial wellness programs like student loan repayment assistance and flexible pension options. Additionally, mental, physical, and emotional health benefits tailored to employee needs are being implemented by 27% of companies as wellness becomes a primary focus.
Work-life balance is also a significant investment area, with organizations enhancing support for caregivers and offering lifestyle benefits that help employees juggle personal and family responsibilities. Furthermore, opportunities for continuous learning and career advancement are being increasingly leveraged as strategic advantages for attracting and retaining talent.
“As employees reassess their personal and professional aspirations, businesses must reevaluate their reward strategies,” Gandhi emphasized.
Economic growth supports optimism
Positive salary trends in certain sectors are bolstered by a more extensive economic recovery. Forecasts from both the Arab Monetary Fund and the Central Bank of the UAE predict the economy will expand by 4% in 2024 and 6% in 2025, fueled by robust government initiatives aimed at enhancing local employment.
A budget of $1.7 billion has been designated to promote Emiratisation, targeting the integration of more UAE nationals into private sector roles. By 2023, around 42,000 Emiratis had joined private companies, totaling 92,000, with ambitions to onboard an additional 36,000 by the end of 2024.
However, some analysts caution that the rapid increase in the UAE’s population might suppress average wages in the long term. Recent findings from a Cooper Fitch survey anticipate no average salary growth for new hires in 2025, attributed to population dynamics.
As inflation persists and employee expectations for flexibility grow, UAE firms are reevaluating their compensation frameworks for 2025. According to the Mercer 2024 Total Remuneration Survey, salaries are expected to rise by an average of 4%, driven by heightened competition for talent and escalating living costs.
“Firms must find a balance between employee satisfaction and financial viability,” stated a representative from Guildhall, a prominent recruitment agency in Dubai. “It’s no longer solely about compensation; purpose, growth opportunities, and employee benefits are equally crucial.”
Real estate and aviation drive talent demand
The real estate sector has become a significant contributor to job creation. LinkedIn data indicates that the number of property professionals in the UAE surged by 42% from Q4 2023 to Q1 2024, with job postings in this sector increasing by 94% during the same timeframe.
Bloomberg analysts suggest that although developer activities are thriving, the peak of unit handovers is not expected until 2026-2027, indicating a sustained need for skilled professionals in the real estate arena over the coming years.
Additionally, the aviation industry is witnessing unprecedented recruitment numbers. Emirates’ 2023-24 Annual Report reveals a 10% workforce increase, bringing its employee total to 112,406—the highest in its history. Etihad has also recruited over 2,300 new staff in 2023. The rise in passenger traffic, a crucial employment driver, climbed 13%, reaching nearly 98 million in the first eight months of 2024.
Tech jobs still outpacing supply
The technology sector in the UAE remains a vital source of job creation. The country ranks first in the Middle East and 16th globally in Huawei’s 2024 Global Digitalisation Index (GDI). Although hiring in AI has not accelerated as rapidly as anticipated, 43% of UAE-based respondents in an SAP-YouGov survey identified a shortage of available AI talent as a significant issue.
This ongoing gap between demand and supply is driving up salary packages in fields like AI, data science, and cybersecurity, which experts believe will be pivotal for the future job market in the region.
As geopolitical conditions across the Middle East evolve, security concerns continue to play a pivotal role in the employment outlook in the UAE. Experts anticipate that the emirates will utilize their diplomatic influence to ensure regional peace and economic stability, both of which are crucial for attracting talent.