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The report has been compiled using data from over 500 organisations in 26 sectors from across the region.
Aon Hewitt Middle East's Head of Reward Consulting, Martin McGuigan, said: "All macro-indicators have shown that the economic scenario continues to move in a positive direction with corporates continuing to show confidence in the 2013 economic outlook."
"At large, there are no further reductions in the salary increase projections for the next year which is good news for employees. We have also observed that organizations have increasingly been linking salary increases to performance, which is a healthy trend and indicates the increasing maturity level of the market."
The report predicts that there will be an average salary increase of 5.1% in 2013 for employees in the UAE, based on the input of 174 organisations responding to the survey in the emirates, highlighting that pay increases will vary more across industries than country borders.
The majority of UAE companies included in the report are to give performance-based salary increases, with pharmaceutical and chemical sectors bumping wages 5.8%. A lower 4.1% increase is anticipated in the machinery and equipment sector.
The best salary improvements are to be seen in the professional services sector, with banks providing the highest increase at 8.1%, while the lowest increase will be in transportation, logistics and shipping services at 2.5%.
Notably, much fewer firms are considering freezes, with only 1.3% of organisations surveyed in the UAE expected to maintain salary levels in 2013, compared to 4.1% in 2012. The exception to this trend is Qatar, where around 8% of those surveyed project a freeze, up from 2.4% last year.
Steven Bond, Reporter
