UAE Firms To Increase Wages By 5.2% In 2013

Companies in the UAE are giving their employees an average wage increase of 5.2 per cent in 2013 but are offering only a minor boost in housing allowances, according to a survey conducted by Mercer.

The survey found that the salary increase in the UAE was in line with Qatar and Saudi Arabia at five and 5.6 per cent respectively. However, inflation in both those countries, excluding housing costs, is higher than the 1.6 per cent estimate in the UAE, it said.

Despite a rise in rents and property costs, the survey found that companies are only marginally increasing their employees’ housing allowance.

The poll recorded an increase of eight per cent on housing allowance, slightly higher than the 6.7 per cent increase recorded last year.

“One of the main reasons we have not seen the increase that the market expects is because most organisations feel that housing costs have not reached to pre-crisis levels and allowances have not been reduced in the aftermath,” said Nuno Gomes, Mercer’s information solutions leader for the Middle East.

“As a result, the current amounts should be sufficient to accommodate employees’ housing needs.”

The survey also found that 68 per cent of the organisations polled intended to increase their personnel levels over the year, compared to 60 per cent in 2012. Voluntary turnover among employees in the UAE was also found to be the highest in 2013.

However the survey found that bonus pay-outs among employees in the UAE have fallen by an average of 20 per cent this year.

“Keep in mind that pay-outs in 2013 are based on performance in 2012. With the increased activity we’re seeing in 2013 and the continuous growth of the UAE economy, we should expect bonuses to pick up in 2014.” Gomes said.

Mercer’s 2013 report predicts that salary increases for UAE employees in 2014 will remain close to this year’s figure at around five per cent.