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UAE salaries expected to grow 5% in 2014

Aon Hewitt annual survey paints positive outlook for the UAE

Continued confidence in GCC’s economic stability and resilient business environment

Sep 10, 2013

Dubai, 10th September 2013: Companies across the UAE are predicting an average salary increase of 5% in 2014 – a figure in line with forecasts made for 2013 and 2012, which were 5.1% and 5.2% respectively, indicating economic stability and a continued confidence in the country’s business environment amongst organizations in the UAE.

These are the latest figures from Aon Hewitt, the global talent, retirement and health solutions business of Aon plc (NYSE: AON), released as part of its annual Global Salary Increase Survey 2013. Based on data from a robust comparative group of over 500 organizations across the Middle East, including 180 in the UAE, the report offers a unique snapshot of salary increase trends which, in turn, enables organizations to benchmark their forecasts with the market in order to remain competitive.

When looking at the distribution of salary increases, we can see that there is a clear correlation between performance and salary increases. Figures show that a 7.2% salary increase was given for those ‘far exceeding expectations’ compared to a 0.1% salary increase for employees that ‘did not meet expectations’.

Overall Salary Increase by Performance

Far exceeding expectations

 

Often exceeded expectations

Met expectations

Often did not meet expectations

Did not meet expectations

% salary increases

% salary increases

% salary increases

% salary increases

% salary increases

7.2%

6.6%

4.0%

1%

0.1%

 

 

 

 

 

 

Robert Richter, Compensation Survey Manager, Aon Hewitt Middle East, said: “Whilst linking individual performance to pay is not uncommon, we advise employers to use annual bonus payments as the larger component for rewarding high performers. Salary increases typically take into a consideration a number of other factors as well as performance, including inflation, rises to reflect promotions, and the need to ensure that employees at the same grade remain within a single pay band.”

Across the GCC, companies are predicting an average salary increase of 5.5% for 2014, a figure in line with forecasts made for 2013 and 2012, which were both at 5.4%, indicating a continued confidence in the economic stability of the whole region and an increasingly resilient business environment.

Among the participating GCC organizations, Saudi Arabia based companies gave the highest salary increase projection for 2014 at 6%. This is a slight increase on last year’s 5.8% predicted raise and comes at a time when the Kingdom’s economy is growing, with economists forecasting a growth rate of 5.3%[1] for 2013. Kuwait and Oman firms estimated a 5.6% salary growth, similar to the 2013 predictions, while companies in Bahrain forecasted 5.2% – an increase on last year’s 4.7% projection.

Country

Predicted Salary Increase 2013

Predicted Salary Increase 2014

Bahrain

4.7%

5.2%

Kuwait

5.8%

5.6%

Oman

5.6%

5.6%

Qatar

5.6%

5.6%

Saudi Arabia

5.8%

6%

UAE

5.1%

5%

Average

5.4%

5.5%

Looking back to 2012 and comparing the predictions from the survey for 2013 (5.4%) with actual rises awarded earlier this year (5.3%), we see good alignment, allowing employees to feel confident the trend is set to continue into 2014.

Country

Actual Salary Increase 2013

Predicted Salary Increase 2013

Bahrain

5.2%

4.7%

Kuwait

5.4%

5.8%

Oman

5.2%

5.6%

Qatar

5.5%

5.6%

Saudi Arabia

5.7%

5.8%

UAE

4.9%

5.1%

Average

5.3%

5.4%

Aon Hewitt has been conducting the survey on an annual basis across the globe for 36 years and launched it in the Middle East for the first time in 2009. The report is free to participating organizations and available at a price of $500 to others.

The survey is part of Aon Hewitt’s suite of evidence-based, research-led studies including Qudurat, Best Employers Middle East (BEME), Total Compensation Measurement (TCM™) and People Risk Index (PRI®).

-End-

About Aon Hewitt

Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness.  Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide. 

 

For more information on Aon Hewitt, please visit www.aonhewitt.com.

About Aon

Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 65,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world’s best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon’s global partnership and shirt sponsorship with Manchester United.

Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon’s global partnership and shirt sponsorship with Manchester United.

Media Contact:
Joanna MacAdie
DABO & Co
+971509843473
Joanna.m@daboandco.com

[1] London-based research firm Capital Economics



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