Mercer, a business of Marsh McLennan (NYSE: MMC) and a global leader in investment, health, and workplace solutions, has unveiled the findings of its annual Total Remuneration Survey (TRS). The survey highlights a projected 4% increase in overall salaries across all industries in the UAE for 2025, alongside plans by over a quarter (28.2%) of organisations to expand headcount next year. These findings signal a robust demand for skilled talent amidst a resilient economic outlook.
The survey, which gathered insights from over 700 companies across a diverse range of industries—spanning energy, financial services, engineering, construction, real estate, manufacturing, retail, services, life sciences, and technology—also revealed sector-specific salary trends. Companies in the consumer goods industry are forecasting the highest salary increases at 4.5%, followed by the life sciences and technology sectors at 4.2% and 4.1%, respectively. Both the energy and financial services industries are aligned with the overall market projection of a 4% increase.
Notably, employers across industries indicated plans to offer uniform salary increases to employees at all levels.
“It is very encouraging to see a large segment of UAE employers planning to increase base salaries in 2025, reflecting a resilient and optimistic economic outlook. In addition to increasing salaries, HR professionals should also review their housing allowances, in light of increasing housing costs in the country, to remain competitive,” said Andrew El Zein, Mercer’s UAE Career Products Leader.
Impact of AI and Digital Transformation on Workforce Dynamics
Mercer’s survey also delved into the influence of Generative AI, automation, and digital transformation on the demand for skilled talent. The UAE leads the Middle East in AI adoption, with 74% of people utilising AI at least once a week. CEOs in the UAE view AI as a key growth driver, as highlighted in Mercer’s Global Talent Trends report.
Ted Raffoul, Mercer’s Middle East Career Products Leader, commented, “Generative AI and automation are rapidly transforming the job landscape, shifting the skills our workforce needs and placing additional pressure on salaries. Business leaders play an important role in nurturing digital literacy and cultures that are open to change, so employees at all levels can be prepared for the future of work.”
Recommendations for Employers
To navigate this evolving landscape, Mercer advises employers to assess their existing skill inventories, identify gaps, and develop targeted upskilling programmes. Understanding key hiring and retention drivers will also be critical to securing the necessary talent for future growth. Additionally, employers are encouraged to craft a differentiated Employee Value Proposition (EVP) to attract and retain top talent in a competitive market.
The findings underscore the UAE’s dynamic economic trajectory and its forward-thinking approach to embracing technological transformation, positioning the nation as a regional leader in workforce innovation and growth.
