UAE Salaries set to rise by 4% in 2025 amid economic optimism

Salaries in the UAE are projected to rise by an average of 4% in 2025, with more than a quarter (28.2%) of organizations planning to expand their workforce, as revealed by Mercer’s annual Total Remuneration Survey (TRS). This survey, backed by Marsh McLennan, gathered insights from over 700 companies across various sectors, including energy, financial services, engineering, construction, real estate, manufacturing, retail and wholesale, services, life sciences, and technology.

Salary trends by sector indicate that the consumer goods industry is expected to experience the highest increase, at 4.5%. This will be followed by the life sciences and technology sectors, with anticipated rises of 4.2% and 4.1%, respectively. Meanwhile, the energy and financial services sectors are expected to see increases in line with the overall market average of 4%. Employers across industries plan to implement uniform salary adjustments for workers at all levels.

Andrew El Zein, Mercer’s UAE Career Products Leader says it is encouraging to witness a substantial number of UAE employers intending to raise base salaries in 2025, which reflects a robust and optimistic economic outlook. In addition to salary increases, he adds HR professionals should reevaluate housing allowances to remain competitive and rising living costs.

The survey also examined the increasing impact of generative AI, automation, and digital transformation on workforce requirements. With 74% of residents in the UAE utilizing AI at least once a week, business leaders anticipate that AI will play a crucial role in driving future growth, according to Mercer’s Global Talent Trends.

Ted Raffoul, Mercer’s Middle East Career Products Leader, pointed out the challenges and opportunities presented by emerging technologies: “Generative AI and automation are quickly reshaping the employment landscape, altering the skills our workforce requires and exerting additional pressure on salaries. Business leaders must promote digital literacy and cultivate cultures of adaptability to prepare employees for the future of work.”