UAE employers break pay lines to retain top talent: Here's what they're doing amid 'modest pay hike'

As wage growth in the UAE remains relatively modest at around 4%, employers are increasingly turning to enhanced workplace benefits and perks to attract and retain skilled professionals, HR and legal advisers said, according to a Khaleej Times report.

Rather than relying solely on traditional offerings such as health insurance and travel reimbursements, companies are expanding their employee value propositions by introducing mental health support, flexible work arrangements, wellness stipends, dedicated learning and development budgets, and financial and legal planning services.

The shift reportedly reflects a growing focus on non-monetary benefits as organizations struggle to remain competitive in the talent market despite limited room for significant pay increases.

What did the employers say?

Sanjeev Giri, head of sales and operations at Adecco UAE, said the growing emphasis on employee benefits is not aimed at making companies “more generous”, but rather at limiting competition based on wages. He noted that with wage increases remaining “modest” and job turnover slowing compared to previous years, employers are increasingly focusing on benefits that boost confidence and boost employee loyalty.

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“In today’s workplace, the most meaningful benefits are those that address the overall well-being and long-term security of employees. Employers are expanding their offering to include mental health support, flexible and hybrid working, wellness contributions and structured learning budgets. One of the fastest growing areas is financial well-being,” he added.

Giri noted that the introduction of modern savings schemes has allowed employers to move beyond traditional post-service gratuity arrangements by offering options that allow gratuity funds to be invested rather than simply kept. He pointed out that the UAE government now allows private sector companies to invest employees’ post-employment benefits, creating new opportunities for long-term wealth accumulation.

He added that employers are also extending support services beyond financial benefits, with some companies assisting employees in areas such as will preparation and succession planning.

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“A small but growing number of organisations, particularly larger firms based in financial centers such as DIFC, are starting to offer these services – primarily because the workforce here is heavily expatriated and people are concerned about protecting their families and assets in the UAE. While this offering is not yet widespread, it is seen as a highly effective and low-cost benefit that signals a deeper level of further care and commitment from employers,” said Giri.

Corporate interest in succession planning initiatives for employees has grown significantly in recent months, with HR and people and culture teams putting more emphasis on educating employees on inheritance regulations, guardianship and asset protection strategies, according to UAE-based real estate consultancy Just Wills Legal Consultants.

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The growing demand is largely fueled by Dubai’s expatriate community, the report said, adding that many expatriates have developed deep ties to the UAE through home ownership, family commitments and financial interests in various countries, prompting employers to offer more support in long-term legal and estate planning.

Mohammad Marria, CEO and founder of Just Wills Legal Consultants, said: “For years, employee benefits have been centered around immediate needs such as healthcare and insurance. What we are now seeing is a clear shift towards long-term planning, where both employees and employers recognize the importance of legal preparedness, particularly in a market such as the UAE where inheritance laws can be complex for expatriates.”