Will UAE businesses raise salaries by 4.4% in 2023 to retain talent and cope with inflation costs?

Will UAE businesses raise salaries by 4.4% in 2023 to retain talent and cope with inflation costs?

Dubai: Businesses in the UAE could come up with a 4.4 per cent salary hike this year, a marginal hike on the 4.2 per cent gain employees got in 2022. This is according to a survey of nearly 500 businesses in the UAE by WTW, an advisory firm. Organisations are raising their pay packets for three specific reasons: 80 per cent say they are concerned about inflation (and trying to match inflationary increases with salary hikes); 37 per cent said they are responding to a ‘challenging’ labour market; and 32 per cent said they want to improve the retention of existing staff. In fact, four in ten employers said their pay budget is now higher than they thought it would be, according to the survey. “Employers are facing tough choices as they try to control costs during a challenging economic climate - but also struggle to keep their pay levels attractive,” said Laurent Leclere, Director of Reward Data Intelligence, WTW UAE. “The pressure of inflation and a competitive labour market are forcing many to increase their pay budgets so that they can both retain and attract the best staff. “Those organizations that succeed will have a clear reward strategy and