UAE companies ‘plan 5% pay rise’ in 2023 to offset inflation

UAE companies ‘plan 5% pay rise’ in 2023 to offset inflation

UAE companies are planning for budgeted annual salary raises for 2023 at 5%, which is higher than the 3-4% observed in recent years. This is in response to two thirds of firms receiving employee requests for higher compensation to offset spiralling inflation.

Firms are feeling the pressure to adjust compensation packages according to global consulting firm Mercer, with its latest spot survey revealing that 67% of businesses have received requests from employees regarding compensations and allowances to offset the rising inflation in the UAE.

Almost 84% of businesses have yet to adjust employee compensation this year in response to higher than normal inflation, the survey found.

Retaining talent

More than 200 global and local companies from all sectors were surveyed for Mercer’s 2022 UAE Inflation Spot Survey, with only 16% having taken some form of action, including one-time lump-sum payments, off-cycle salary increases and housing allowance increases, as they look to retain talent, and have increased salaries by an average of four per cent during annual salary increase cycles at the beginning of 2022.

Most business in the UAE however are resisting employee demands. Even with inflation in the UAE projected to reach 5.6% in 2022, according to the latest data from the Central Bank