Salaries to go up marginally in UAE, globally in 2019: study
Salaries in the UAE are likely to increase by around 3.9 percent in 2019. However, taking into account an expected inflation of 3.2 percent this year, workers will witness their wages increasing only marginally by 0.7 percent, according to a study released by Korn Ferry on Sunday.
The Korn Ferry Global Salary Forecast 2019, which draws data from more than 20 million job holders in 25,000 organizations from more than 110 countries, revealed that real-wages are expected to grow only at an average of 1 percent globally in 2019.
“The UAE continues to position itself as a highly attractive workplace destination in the region. Average real salary increases are projected to move back to a positive level after being in negative figures in 2018. At the same time, inflation has halved in the last 12 months and the cost of living is declining, resulting in greater disposable income for workers at all levels,” said Vijay Gandhi, regional director – Europe, Middle East and Africa, Korn Ferry Products.
Real wages were projected to increase 4.8 percent in 2019, not adjusting for inflation, according to the Total Remuneration Study released by global consulting firm Mercer in November 2018. Partly due to the region’s economic diversification, digitization drives and healthy job prospects, new trends are emerging in hiring and compensation.
Regional real wage growth
In comparison, Saudi Arabia is expected to witness the highest inflation-adjusted salary increase in the GCC region in 2019 with forecasts pegged at 2.6 percent. This spells good news for workers in the country given that the real wage growth predicted for 2018 was 0.1 percent.
Kuwait is not far behind with an expected real wage increase of 2.2 percent after taking into consideration the inflation rate forecast of 1.6 percent.
“While the Middle East continues to face a similar inflationary pressure as we are seeing across the globe, key financial centers should see improved performance in 2019. Saudi Arabia and Kuwait are expected to outpace the region in terms of real salary increases, with both showing significant year-on-year increases,” said Vijay Gandhi.
Lebanon and Qatar, on the other hand, are predicted to see a drop in inflation-adjusted salaries in 2019. Despite posting growth in the previous year, Lebanon is expected to have a -1.7 percent dip in real wages, while Qatar is forecast to witness a -0.5 percent slide in real wages due to rising inflation in the region.
Source: Korn Ferry Global Salary Forecast 2019 report
Global real wage growth
Real wage predictions for Asia and Europe showed a considerable hike, with a real salary increase of 2.6 percent expected in Asia followed closely by a 2 percent real salary increase in Eastern Europe. India showed the highest with a positive 5 percent increase inflation-adjusted wages expected in 2019. Malaysia and Singapore are close behind with real salaries expected to increase by 3.6 percent and 3 percent respectively.
In the UK, inflation-adjusted salaries are expected to grow by 0.6 percent. Germany is the other European nation showing positive signs for workers with a real wage hike of 1 percent expected in 2019.