Aon Hewitt reveals salary stability in UAE for 2012

On average, the organizations surveyed both predicted and subsequently reported an average increase of 5.2% in salaries at the close of 2012.

The winter update of the Salary Increase Survey also gives organizations an opportunity to reforecast their salary increases for 2013, having last made their estimates in the middle of 2012.

Overall, the 50+ UAE companies surveyed revised their forecast of average salary increase during 2013 from 5.1% to 4.8%. The results indicate an underlining stability in the market with relatively consistent rates of increase and overall growth in salaries year-on-year.

While most UAE organizations surveyed based salary increases on market competitiveness others reported that salary increases were also influenced by other factors, including business performance (18.6%); and by tracking inflation and consumer prices (9.3%).

Martin McGuigan, Head of Reward Consulting at Aon Hewitt Middle East, commented on the latest results: "The Aon Hewitt Middle East Salary Increase Survey provides a valuable snapshot of overall trends in salary increases in the UAE and wider region and enables organizations to benchmark their forecasts with the market in order to remain competitive."

"We continue to see a growing trend towards performance-based pay. It is to be expected that merit-based pay will become more prevalent as the UAE employment market continues to mature, giving organizations a means of capping their pay budget in accordance with business performance. Indeed, Aon Hewitt has seen an increase in demand for such information from a number of core industry verticals - including public sector, healthcare and media - and, as a result, we will soon be launching a series of new data surveys to give businesses better insight into salary levels within their specific sector," he added.

The report also reveals that no participating UAE - or indeed GCC - firms were planning a hiring freeze in 2013; 97.2% of those UAE companies surveyed have ruled out making any redundancies in 2013; while a large percentage - 41% - are actually looking to increase recruitment this year compared to 2012.

Aon Hewitt has been conducting its annual landmark salary survey across the globe for 36 years; launching it in the Middle East for the first time in 2009. The survey was conducted during 2012 in seven regional countries: Bahrain, Egypt, Kuwait, Oman, Qatar, the Kingdom of Saudi Arabia and the UAE.

The survey is part of Aon Hewitt's suite of evidence-based, research-led studies including Qudurat, Best Employers Middle East (BEME), Total Compensation Measurement (TCM) and People Risk Index (PRI).