Salary Demands Rise in the UAE

In the United Arab Emirates (UAE), applicants demand up to 30% higher salaries than what employers offer, according to a recent report. The discrepancy is particularly noticeable in executive positions, where the gap is even wider. The rising cost of living and a shortage of expertise are behind this phenomenon, while employers increasingly have access to a global workforce.

Pressure from Increasing Costs

The population of the UAE has grown significantly over the past four years, leading to increased rental prices, school tuition fees, transportation costs, and healthcare expenses. According to Worldometers, the country's population is expected to grow from 9.789 million in 2021 to 11.346 million by 2025. However, this population increase also poses challenges: growing costs in housing, education, and healthcare lead workers to demand higher wages.

According to the Naukrigulf Hiring Outlook Report, applicants generally ask for 15-30% higher salaries than what employers are willing to pay. This difference is even wider in executive positions, where the shortage of expertise and competition for the best professionals is more pronounced. Due to rising costs, new employees are coming in with higher salary demands, but employers have a broader selection from the global labor market, limiting the extent of wage increases.

The Expertise Shortage and Higher Salary Demands

According to the report, skilled workers such as IT specialists, cybersecurity experts, and AI professionals may ask for 25-50% higher salaries than average. Similarly, sales and marketing professionals in the SaaS and fintech sectors can negotiate 20-30% higher salaries thanks to their specialized skills.

The expertise shortage not only leads to higher salary demands but also presents challenges for companies. The report states that demand for engineers, particularly in civil, mechanical, and electrical fields, has increased, especially in the construction, infrastructure, and energy sectors. Additionally, significant shortages are also noticeable in technology fields such as cybersecurity, artificial intelligence, cloud computing, and full-stack development.

The Impact of the Global Workforce

The UAE and the region's labor market are becoming increasingly attractive to global applicants. According to Naukrigulf, employers now have access to a larger pool of expertise, which limits wage growth. While professionals expect higher salaries, the large number of applicants moderates the extent of salary increases, making it more difficult for applicants to achieve significant raises despite rising costs.

The report indicates that 85% of companies plan to hire in the next six months, while 7% anticipate layoffs. Demand is highest for mid-level positions, with 71% of hires focusing on this segment, while executive positions also see significant demand.

Future Challenges

The UAE's economy is dynamically developing, but the expertise shortage and rising cost of living pose serious challenges for both employees and employers. The shortages experienced in technological and engineering fields highlight the role that the educational system and vocational training play in addressing the problem. At the same time, the global labor market plays an increasingly significant role, creating opportunities but also competition for the local workforce.

Overall, the UAE labor market is in a transitional phase, where higher salary demands and expertise shortages seek equilibrium. In the future, companies and the government must work together to ensure sustainable economic growth while improving the standard of living for workers.