Latest wage study also looks at which industries get actual salary increases in 2017
Salaries at some companies in the UAE are still forecast to increase next year despite the current economic climate, according to the latest study.
Global professional services firm Aon reported on Monday that employers in UAE are expected to grant an average wage increase of 4.3 per cent in 2018, the second-highest in the Gulf Cooperation Council (GCC) region.
The forecast is based on feedback gathered from 600 multi-national and local employers in the region — more than half of whom are based in the UAE. But it doesn’t necessarily mean increases will be granted across the board. Other recruitment specialists had earlier said that pay cuts and redundancies are still on the cards for some employers.
Out of the 323 UAE companies covered in the survey, only 5 per cent (16 firms) indicated they would freeze salaries next year.
Employers in the hi-tech industry are likely to grant the biggest increase at 5 per cent. In the onsumer products sector, wage adjustments are forecast to average 4.6 per cent, while those in life sciences are likely to see a 4.4 per cent raise.
Those in “other manufacturing” and banking and finance sectors will get the lowest adjustments, estimated to be around 4.3 per cent and 3.8 per cent, respectively.
Among the countries surveyed, Saudi Arabia and Kuwait are expected to be the most generous next year, as employers there are predicted to adjust salaries by 4.5 per cent.
Oman employees will also likely get an increase of 4.3 per cent. Workers in Bahrain, on the other hand, are expected to get the lowest salary adjustment, projected to be around 4 per cent.
Aon’s research is said to be the largest of its kind in the Gulf region. It also found that actual wage adjustments granted this year were lower than predicted, owing largely to the slow economy and low oil prices. Saudi Arabia gave away the biggest actual increase at 4.4 per cent
Within the UAE, actual salary increase this year stood at 4.3 per cent, lower than the 4.6 per cent forecast.
Employees in the life sciences sector enjoyed the biggest increase in paycheque (5.1 per cent), followed by those in the hi-tech industry (4.6 per cent).
Workers in the construction, engineering, transportation, logistics and shipping services sectors suffered the lowest salary increases at an average of just 2.4 per cent.
For next year, Aon said there is a chance that workers will see an upside in the actual salary increase, as the economic conditions are improving.
The global professional services firm noted that government spending has increased, while oil prices are stabilising. And while it can add to rising inflation, the implementation of 5 per cent value-added tax (VAT) may also boost gross domestic product (GDP) growth.
Gulf Talent reported early this year that 23 per cent of 800 GCC companies had plans to reduce headcounts this year. Within the UAE, about 15 per cent said they were planning to make some job cuts.