UAE Salaries Set to Rise by 2026

Salary Increases in the UAE by 2026: Growing Expectations and Labor Market Challenges

The labor market in the United Arab Emirates and the broader Gulf region faces significant changes by 2026. More professionals are expecting pay raises, and employers increasingly feel the pressure to offer competitive compensation and career opportunities to retain top talent. According to the Hays GCC Salary Guide 2026, dissatisfaction with salaries remains widespread despite more professionals receiving raises in 2025 than before.

Salary Increases Last Year – Still Not Enough

Hays' recent report reveals that 58% of respondents received a salary increase in 2025, compared to only 51% the previous year. The most common increase was between 2.5% and 5%, but 12% reported receiving an increase of more than 20%. Nevertheless, 60% of workers believe that their current pay does not reflect their responsibilities and workload. This indicates that salary increases have not kept pace with employee expectations, especially as skilled labor becomes increasingly hard to find.

Higher Expectations for 2026

One of the most interesting parts of the report is the future forecast: 78% of respondents hope to receive a raise in 2026, with nearly a quarter of them expecting an increase of more than 20%. However, not only are the employees optimistic, but the employers as well: 70% state that their company is expected to raise salaries in the coming year, with most planning increases around 5%.

Increasing Recruitment Activity, Especially in the UAE and Saudi Arabia

During 2025, two-thirds of employers increased their workforce. The most active recruitment was in the UAE and Saudi Arabia, where significant investments continue in technology, banking, construction, real estate development, transportation, and logistics. The creation of new jobs is driven not only by economic growth but also by diversification strategies and digitalization goals.

By 2026, demand for technical, digital, leadership, and management positions will increase, along with the growing popularity of flexible employment forms such as contract or freelance work. This trend allows companies to respond more flexibly to project-specific needs and seasonal pressures.

Skill Shortage Continues

Despite active recruitment by companies, skill shortages remain a severe issue. According to the report, 90% of companies experienced some level of skill shortage in 2025, with the range of issues extending from mild to extreme. The most common reasons included low or non-competitive salaries, strong market competition, lack of industry training, and limited advancement opportunities.

Turnover Rate is Also High: 27% of professionals switched jobs last year, and another 40% are considering a change in 2026. Therefore, employees decide not only based on higher salaries but also on the complete compensation package and working conditions.

It's Not Just About Pay – Benefits Are in Focus

While salary remains a key factor in decision-making, non-monetary benefits are increasingly significant. The most valued benefits by employees include support for children's education, extra vacation days, flexible working, remote work opportunities, and mental health support rest periods.

In contrast, employers most commonly offer paid sick leave, basic health insurance, and a few extra days off. This discrepancy between offered and expected benefits can contribute to workforce turnover, particularly among talented and experienced professionals.

Competition Intensifies: Opportunities in Dubai and the Region

Dubai and the entire GCC region remain attractive destinations for international professionals, especially because of strong economic diversification strategies, the growing digital economy, and high-quality living standards. However, employers face a serious challenge: how to offer more attractive salaries and benefits while maintaining cost control and profitability.

The current situation indicates that raising salaries alone is not enough. Employee appreciation and loyalty can be achieved with a complex, multi-faceted set of tools, focusing not only on pay but also on development opportunities, work-life balance, and considering individual needs.

Summary

2026 could be a year of change for the UAE labor market. While salary growth continues, employee expectations are increasing faster than what employers can offer. To remain successful in this increasingly competitive environment, companies need to rethink not only their compensation policies but their overall HR strategies as well. Dubai could continue to play a leading role in this process by adapting flexibly and innovatively to global trends.

(Source of the article based on Hays' recent report.)