Ask anyone about the cost of living today, and you’re likely to be discussing rising rents, surging food bills, escalating cost of children’s education, as well as the price of clothing, travel and a whole lot of other day-to-day items.
What doesn’t seem to be edging up, however, is salaries we earn, right? Wait until 2014, says new research from professional services firm Towers Watson, which says that, next year, we are all going to earn more than what inflation will take away from us.
Employees in the UAE can expect average pay increases of 5 per cent in 2014, it says, and adds that inflation will average 2.5 per cent, resulting in an increase in disposable income, or the real pay hike, to the tune of 2.5 per cent.
Rising rentals, the primary worry of UAE employees, will be more than offset by employers looking to retain talent, the firm maintains. Towers Watson expects annual housing allowances to be closely monitored by companies in the UAE in 2014 to ensure levels remain competitive following significant increases in rental costs in the past year.
For the past two years housing allowances for executives have increased by 9 per cent while management level employees received increases of 5 per cent and professionals 2 per cent, according to Towers Watson research.
In a poll of HR professionals attending Towers Watson’s recent Data Services General Industry Forum, 40 per cent stated that they had recently reviewed their employee housing allowance policies.
“2014 will be challenging for organisations as they will need to balance their ability to recruit and retain the best talent, whilst also ensuring remuneration costs do not exceed company budgets,” said Billy Turriff, Business Leader for Data Services & Technology at Towers Watson.
“UAE pay awards are broadly in line with other countries across the Gulf and with the lowest anticipated inflation in the region, real income rises in the UAE are predicted to be second only to Kuwait,” he added.
The results show healthy pay rises across the Middle East with salary increases in Kuwait, Oman, Saudi Arabia, Bahrain and Qatar, all between 5 and 6 per cent.
Projected pay increases by GCC countries in 2014:
Avg Pay Hike
Real Pay Hike for employees
UAE 5% 2.5% 2.5%
Kuwait 6% 3.2% 2.8%
Oman 5.3% 2.8% 2.5%
Saudi Arabia 5.5% 3.3% 2.2%
Bahrain 5% 3.1% 1.9%
Qatar 5.3% 4.2% 1.1%
“In a fast moving and rapidly growing economy such as the UAE, circumstances change quickly and companies often find their pay policies out of date if they are not monitored closely and refreshed regularly,” concluded Turriff.