Key Takeaway
Nearly 70% of UAE employees report that rising living costs are outpacing their salaries, with two-thirds considering resignation within three months as compensation fails to match inflation pressures, particularly in housing and education.
A concerning trend is emerging across the UAE workforce, with nearly seven out of 10 employees reporting that rising living costs are significantly outpacing their salaries. This financial pressure is driving unprecedented numbers of workers to consider leaving their positions, according to recent research that highlights growing economic challenges facing the Emirates’ diverse workforce.
The comprehensive study by Korn Ferry reveals alarming statistics about employee satisfaction and retention in the UAE job market. Among the key findings, 66% of employees face the difficult choice between financial stability and career continuity, with many concluding that their current earnings simply cannot keep pace with increasing expenses.
Compensation Takes Priority Over Career Development
The research demonstrates a fundamental shift in employee priorities, with workers increasingly focusing on comprehensive compensation packages rather than traditional career advancement opportunities. This change reflects broader economic pressures affecting households across the Emirates, particularly in essential areas like housing and children’s education costs.
“Employees are facing increased costs of living, especially in housing and children’s education. However, salaries haven’t kept pace with these rising expenses, and, as a result, benefits and pay have become the leading reason for leaving companies,” explained Vijay Gandhi, regional director of Europe, Middle East, and Africa (EMEA) for Korn Ferry Digital.
Recent UAE cost of living analysis shows multiple price increases affecting residents, from parking fees to insurance premiums, adding pressure on household budgets.
Eight Out of Ten Workers Open to Job Changes
The study’s findings reveal that 80% of UAE employees are willing to change jobs for better compensation, followed by job security and career advancement considerations. This statistic represents a significant challenge for employers seeking to maintain stable workforce levels whilst managing operational costs.
Employee benefits and learning opportunities emerge as additional key factors influencing resignation decisions. Workers increasingly evaluate potential employers based on comprehensive packages that address both immediate financial needs and long-term career development prospects.
Understanding current UAE salary trends becomes crucial for both employees and employers navigating this challenging landscape.
Salary Increases Lag Behind Expectations
Korn Ferry’s 2024 UAE Salary survey, covering 843 companies, revealed an average salary increase of just 4% across the workforce. This modest growth rate falls short of addressing the significant cost pressures many employees experience, particularly in essential areas like housing and education.
The GCC Salary Guide 2025, released by Hays earlier this year, provides additional context: nearly half (48%) of UAE employees received salary increases in 2024, with most increments ranging between 2.5% and 5%. Looking ahead, 75% of workers expect salary increases in 2025, creating pressure on employers to deliver meaningful compensation adjustments.
These expectations align with broader salary growth projections indicating positive momentum in certain sectors.
Expat Community Drives Economic Complexity
With expatriates projected to comprise 88.5% of the UAE population by 2025, the country maintains its position as one of the world’s most diverse and competitive talent markets. This demographic reality creates unique challenges for workforce planning and compensation strategies.
“While this growing expat community drives economic momentum — supported by a projected 5% annual GDP growth — rising living costs, especially in housing and education, are pushing professionals to prioritise stability when considering their next move,” Korn Ferry noted.
The research highlights how Dubai’s living costs particularly affect families, with education and housing representing the largest expense categories for most households.
Housing and Education Costs Drive Financial Pressure
The study identifies housing and children’s education as the primary cost drivers affecting employee financial stability. Many families find these essential expenses consuming disproportionate portions of their monthly budgets, leading to difficult decisions about career priorities.
Recent analysis shows significant rental increases across Dubai, with some areas experiencing rate doubles over the past four years. This housing pressure has prompted employees to actively seek enhanced compensation packages from employers.
Educational expenses represent another significant concern, with private school fees ranging substantially across different curricula and quality levels. These costs often surprise newcomers to the region, making comprehensive salary planning essential for family stability.
Global Workforce Trends Context
The Workforce 2025 survey included more than 15,000 professionals worldwide across ten major markets, including the US, UK, France, Germany, Brazil, UAE, Saudi Arabia, Australia, Japan, and India. This global perspective provides valuable context for understanding whether UAE workforce trends align with international patterns.
Participants ranged from entry-level positions to CEOs, offering comprehensive insights into how different professional levels experience current market conditions. The research suggests that compensation pressures affect workers across various seniority levels, not just entry-level positions.
Implications for Employers and Job Seekers
For employers, these findings suggest the need for comprehensive review of compensation strategies beyond basic salary adjustments. Companies that proactively address cost-of-living concerns through enhanced benefits packages may gain competitive advantages in talent retention.
Job seekers should consider total compensation packages when evaluating opportunities, including housing allowances, education benefits, and healthcare coverage. Understanding average salary ranges across different sectors helps in realistic expectation setting.
The research also highlights the importance of timing career moves strategically, considering both market conditions and personal financial requirements.
Related Articles:
- UAE Salary Trends 2025: 75% of Employers Project Pay Increases
- Dubai Salary Guide: Average Earnings & Living Costs in 2025
- UAE Cost of Living 2025: Major Price Increases Affecting Residents
- Complete Guide to Average Salary in Dubai: 2025 Pay Scales
- UAE Workers Push for Higher Allowances as Living Costs Surge
Additional Resources:
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