Companies in the UAE plan to increase employee salaries by about five percent this year, according to a new survey by Towers Watson Middle East.
Its latest Salary Budget Planning Report for Europe, the Middle East and Africa (EMEA) said salaries for UAE employees were likely to rise by about three percent above the rate of inflation.
It added that employees in Saudi Arabia will see the highest increases at six percent against an inflation rate for 2012 of 4.1 percent.
Towers Watson also said salary increases are expected to be consistent across the remaining Gulf States at between five and 5.5 percent.
“These increases will feel more significant in the UAE and Bahrain, where inflation is currently running at a lower rate,” the report said.
The survey also revealed that top performers will benefit this year as more than 75 percent of the companies surveyed said they have allocated a large portion of their 2012 budget to high performing employees.
Billy Turriff, line of business leader – Data, Surveys and Technology, Towers Watson, said: “The results clearly show that job market trends across the GCC point to a positive and steadily growing market.
“The last few years have been a tough one for most economies across the globe. While many markets are still grappling under the weight of the crisis, the Gulf region continues to remain a lucrative one for expansion, thus attracting talent and new investments from across the globe.
“Additionally, we are seeing an increase in the number of initiatives undertaken among organisations to nurture and retain local talent.”
Outside of the region, salary increases are set to be consistent across Europe’s largest economies at or around three percent, the survey showed.
Russian companies expect to grant salary increases of 10 percent on average against an inflation rate for 2012 of 5.9 percent, while South African employees will see pay increase by an average of 7.5 percent.
Towers Watson’s survey incorporated pay data from 4,200 companies across 60 countries, and was submitted for the twelve-month period ending January 30.
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