GCC wages are set to rise at an average of 5 per cent in 2015, rebounding from a brief dip to 4.8 per cent last year, a report said.

However, figures collected from general industry indicate that this rate of salary will descend back to 4.8 per cent into 2016 added the latest Salary Budget Planning report from Towers Watson, a leading global professional services company.

Inflation in the UAE is expected to rise by 3.1 per cent in 2016 and hitting a six-year high earlier this year on rising housing and utility costs, the report said.

It offers some alarming insights for workers at all professional levels, who should start feeling more and more pressure upon their disposable income in the near future, said Laurent Leclère, Senior Consultant and Data Services Lead for the Middle East.

“Across the Middle East and Africa, our research reveals that salary budgets are now being set with less and less connection to the Consumer Price Index than they might have been in the past,” he added.

“Pay growth is now being driven by the bigger picture; factors such as the competition for talent, growth expectations and also the shifting weight of base salary or guaranteed cash within the overall reward package against other elements such as car allowances and performance-related bonuses. In the Middle East, allowances are very prevalent and can be a substantial portion of the reward package.”

“Our latest Global Workforce Study confirms that pay together with career growth opportunities remain the main factors in attracting and retaining talents,” Leclère said.

“In the absence of a tendency of wage growth in the UAE, the challenge is working out how to use the salary budget more effectively to ensure sufficient recognition for top performers or those with critical skills, where the market might be moving at a faster pace. It really comes down to segmentation and differentiation and presenting a bigger slice of the reward pie to key members of staff that companies want to secure for the long-term,” he concluded. – TradeArabia News Service