Salaries in the United Arab Emirates are expected to rise by only 5% to 6% this year according to a recent study conducted by recruitment firm Morgan McKinley. “The major caveat is the fall in global oil prices to an eight-year low in 2014. Until the end of 2014, we were looking forward to a bumper year in terms of both the creation of new headcount and salary growth, but we have had to reassess and lower expectations” said Morgan McKinley’s managing director Trephor Murphey.
The UAE job market in 2015: more opportunities but modest salary increase
The company’s Salary Guide for UAE 2015 showed that although the UAE is set to see a better-than-expected increase in job openings in 2015, salaries are not expected to rise beyond the country’s inflation level “The current prognosis is that the fall in oil prices is likely to be short-lived. We will see a 10-12% increase in the number of new jobs, with salaries increasing in line with inflation at around 5-6%. However, if the price should fall further, the economic outlook is likely to change significantly,” added Murphy.
Cost of living still a challenge
Although there may be more job opportunities in the UAE this year, the rising cost of living in the country coupled with modest salary increase could present a challenge to residents. According to Morgan McKinley’s Salary Guide, the cost of living in the UAE surpassed salary raises last year “For many, the actual cost of living is outstripping salary increases with 2014 rents having soared to an annual rate of increase of 15-20% while housing prices increased by 12-15%. One of the effects of this increase in the cost of living is that locally based candidates will tend to wait for an opportunity offering a major salary hike before moving jobs, and this is a factor depressing the talent supply. Many employers, however, are holding firm on salaries and will import professionals from abroad,” added Murphey.