This annual survey, released by Mercer—a leading global consulting firm and subsidiary of Marsh McLennan—reveals that more than a quarter (28.2%) of UAE organizations are also planning to expand their workforce next year, demonstrating robust demand for skilled talent across various sectors.
More than 700 companies in industries such as energy, financial services, engineering, technology, retail, and life sciences participated in the survey. Consumer goods companies project the highest salary hike at 4.5%. Life sciences and technology follow closely with expected increases of 4.2% and 4.1%, respectively, while the energy and financial services sectors are set to match the market’s 4% overall boost.
Andrew El Zein, Mercer’s UAE Career Products Leader, commented on the outlook: “It’s encouraging to see such broad support for wage increases, reflecting a positive economic outlook in the UAE. As housing costs rise, HR professionals should also consider revisiting housing allowances to ensure competitiveness.”
Mercer’s survey additionally highlights the UAE’s rapid adoption of artificial intelligence (AI), with the highest AI usage in the Middle East at 74% weekly. The increasing role of generative AI and automation is expected to shape job functions and the demand for digital skills. According to Ted Raffoul, Mercer’s Middle East Career Products Leader, generative AI transforms job requirements, adding pressure on salaries. He also pointed out that employers must nurture digital literacy and foster adaptability across all levels to future-proof their workforce.
To adapt to this evolving landscape, Mercer recommends that UAE companies assess current skill gaps and develop targeted Employee Value Propositions (EVP) that attract and retain the talent necessary for future growth.
