With the UAE’s economic growth strong, companies are preparing to significantly increase their labor costs. According to a recent study by Hays, almost half of the country’s workers — 48% — have already received a salary increase in 2024, with the most common increase being between 2.5% and 5%. However, the real salary boom is expected in 2025, with three-quarters of employers predicting additional costs for salary increases for their employees, Khaleej Times has reported.
These figures indicate strong confidence among employers in the UAE’s economic prospects. In particular, 77% of companies have already announced plans to actively expand their permanent staff in 2025, demonstrating confidence in the stability of the labor market. At the same time, employees also have high expectations: 74% of respondents expect another salary increase next year, and 65% plan to change jobs, looking for better employment conditions and compensation packages.
Competition among employers for local talent is intensifying
One of the key trends in the UAE labor market is the strategic Emiratization program, which is aimed at increasing the employment of citizens of the country. This is what causes high competition among employers, who offer increasingly attractive conditions for attracting qualified local personnel. Over the past year, 55% of companies reported that they are actively hiring UAE citizens, which is 4 percentage points higher compared to the previous year.
This trend is most clearly demonstrated by the statistics of salary growth among citizens of the country. Those who received a raise saw an average increase in salaries of 16% or even more. However, a significant number of citizens (55%) did not notice any changes in their salaries last year, which indicates uneven income growth across different sectors of the economy. Meanwhile, 72% of UAE nationals expect their salaries to improve in the coming year, indicating an optimistic sentiment among the local population.
In addition to salary increases, employers are trying to retain UAE nationals through innovative approaches such as training, career development and skill advancement. These factors have proven to be no less important for employees than financial incentives, as 67% of citizens have already planned to change employers in 2025 precisely due to insufficient attention to professional development.
AI technologies are becoming a factor in the development of the UAE labor market
One of the defining trends shaping the labor market in the United Arab Emirates is the active implementation of artificial intelligence (AI). According to a study by Hays, about 79% of employers in the UAE plan to allow their employees to use AI tools in the workplace in the near future. More than half of companies (65%) are already actively recommending the integration of such technologies into everyday work.
This trend reflects the UAE’s intention to become a global leader in innovative technologies and highly skilled labor. It is significant that almost half of companies (49%) are optimistic about the country’s economic prospects for 2025, linking the future to the introduction of the latest technologies into work processes. The majority of professionals, according to the study, are hired for permanent positions, which further confirms the readiness of companies to make long-term investments in human capital.