Latest survey reveals that UAE and GCC average salaries are expected to grow over 5 percent in 2014.
According to the latest figures released by Aon Hewitt, the global talent, retirement and health solutions business of Aon plc, as part of its annual Global Salary Increase Survey 2013, UAE corporations are predicting an increase of 5 percent in the average salary of their employees for the year 2014. Across the GCC, this figure is 5.5 percent for the year 2014.
The forecast has been made in line with the numbers that were predicted for the years 2013 (5.1%) and 2012 (5.2%) for the UAE, and 5.4 percent for both 2013 and 2012. The relatively stable forecasts are indicative of the increasing business confidence, owing to political and economic stability across the region.
Top performers gets top rewards
The report noted that top performers were the ones that received the highest percentage raise in their salary. Figures show that a 7.2 percent salary increase was given for those ‘far exceeding expectations’ compared to a 0.1 percent salary increase for employees that ‘did not meet expectations’.
Robert Richter; “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.” — Robert Richter, Compensation Survey Manager, Aon Hewitt Middle East
Saudi Arabia leads growth in GCC salaries
Among the participating GCC organizations, Saudi Arabia based companies gave the highest salary increase projection for 2014 at 6 percent. This is a slight increase on last year’s 5.8 percent predicted raise and comes at a time when the Kingdom’s economy is growing, with economists forecasting a growth rate of 5.3 percent for 2013. Kuwait and Oman firms estimated a 5.6 percent salary growth, similar to the 2013 predictions, while companies in Bahrain forecast 5.2 percent — an increase on last year’s 4.7 percent projection.
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
The survey has been 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 overview of salary increase trends which, in turn, enables organizations to benchmark their forecasts with the market in order to remain competitive.