A new salary forecast for 2026 is giving UAE residents a clearer picture of what to expect next year. Korn Ferry’s latest findings show that companies across the Emirates are planning to increase salaries by an average of 4.1 per cent, signalling steady confidence in the economy. While the number sits slightly below the 4.2 per cent recorded this year, it still reflects a highly competitive job market—especially in fast-growing cities like Dubai, where demand for skilled professionals continues to rise.
With the country’s population expanding at its quickest pace in years and businesses racing to hire and retain the right talent, salaries remain a major talking point for employees planning for 2026.
A growing population continues to shape the job market
Dubai’s population recently crossed four million, marking its highest figure to date. Across the country, the UAE stands at over 11.4 million residents, driven largely by job seekers, young professionals, and investors relocating for better opportunities.
Dubai’s appeal is clear. The city’s growth continues to attract a mix of talent—from those working in engineering and logistics to newcomers entering finance, digital roles, and hospitality. While Dubai has emerged as a major hotspot for global wealth, the majority of new residents are job seekers looking to build long-term careers. This population rise is pushing companies to rethink how they structure salaries, benefits, and growth paths.
Many HR teams now find themselves in a tight spot: demand for skills is rising, competition across the GCC is heating up, and employees are quick to move if an offer sounds better.
Where salary growth is expected to be strongest
The Korn Ferry report highlights a few key sectors that are set to offer stronger salary increases than others. These industries are undergoing rapid shifts and need specialised skills to keep up.
Banking and Financial Services
The UAE’s financial sector continues to thrive, supported by innovation in digital banking, fintech, and wealth management. Banks are offering competitive salaries to secure talent in regulatory, digital, and investment-focused roles.
Real Estate and Property Development
Dubai’s property market remains one of the city’s biggest growth engines. Developers, sales teams, customer service positions, and technical roles are all likely to see steady increases as new projects continue entering the pipeline.
Oil and Gas
Energy companies are strengthening teams across operational and strategic divisions. With long-term national plans underway, the sector continues to offer some of the most attractive salary packages in the country.
Industrial and Manufacturing
As the UAE pushes for greater local production—especially in aviation, logistics, and technology—demand for skilled engineers, technicians, and project specialists is rising.
Retail and Consumer Goods
Retail salaries are expected to increase as brands compete to retain experienced staff, particularly within management and customer-facing roles. Dubai’s tourism-driven footfall adds to this demand.
These sectors stand out as the strongest drivers of pay growth heading into 2026.
Specialist roles remain the strongest drivers of salary hikes
The need for specialised talent continues to grow. Engineering, technology, logistics, finance, and accounting roles remain high on the priority list, with companies seeking employees who can support digital transformation and long-term planning.
Korn Ferry’s experts say that the UAE has reached a stage where compensation strategies are shifting from reactive to strategic. Organisations are planning for the next five years rather than just meeting immediate hiring demands. This shift indicates a more mature and stable job market, especially in cities like Dubai, where innovation projects are shaping the next phase of growth.
Rising living costs push companies to adjust pay
The rising cost of living—especially housing, school fees, and basic expenses—remains one of the strongest reasons behind salary increases. Employers are becoming more aware that competitive wages play a major part in retaining skilled staff.
The Korn Ferry report highlights a significant shift in employee attitudes:
Around 80 per cent of workers in the UAE and Saudi Arabia say they would switch jobs for better pay, an increase of 25 per cent from the previous year.
This signals a major change in workforce expectations. Employees are no longer patient with slow salary adjustments or limited career mobility. Companies that fail to offer competitive packages risk losing their top talent to faster-moving employers.
For HR teams, the challenge is not just offering pay raises but building long-term value through growth opportunities, leadership development, and flexible work structures.
A challenging landscape for young professionals
While overall salary growth remains promising, young workers face a more complex path. The report notes that hiring cycles are longer and salary increments for entry-level roles are more conservative. Companies are also re-evaluating roles as new technologies enter the workplace.
An important shift highlighted is that 43 per cent of organisations plan to replace certain positions with AI, particularly in back-office and operational functions. This could reshape career paths for newcomers entering the market.
Dubai’s young workforce, however, continues to show resilience. Many are upskilling, switching industries, or exploring specialised fields to stay relevant in a rapidly changing job landscape.
The GCC is becoming more competitive for talent
Salary growth is no longer just an UAE conversation. Across the GCC, countries are raising compensation packages to attract global talent. Saudi Arabia leads the region with a projected 4.6 per cent salary increase for 2026, followed by Qatar and Oman at 4.3 per cent, and the UAE at 4.1 per cent.
These differences may seem small on paper, but they matter for companies competing across borders. With major transformation programmes underway—especially in Saudi Arabia—professionals now have more options and stronger bargaining power.
The UAE’s salary outlook for 2026 paints a positive picture. While the increase is slightly lower than this year, the demand for talent remains strong, especially within specialist and high-growth sectors. As Dubai continues to expand and the wider region becomes more competitive, companies are investing in better pay, stronger benefits, and long-term workforce strategies.
For employees, the outlook is encouraging. Salary growth may not be dramatic, but it remains steady—and backed by long-term economic confidence.
Read More:
- Abu Dhabi Grand Prix 2025 Prepares for Record Crowd as Season Finale Heats Up – Social Kandura
- UAE National Day 2025: 11 Activities You Can’t Do During Eid Al Etihad Celebrations – Social Kandura
Follow Social Kandura for more updates on local news and things to do in Dubai and across the UAE.
