Today's Edition
MAYS IBRAHIM (ABU DHABI)
While 2024 saw cautious bonus distributions due to budgetary constraints, 2025 is set to bring renewed optimism, according to the latest Cooper Fitch 2025 UAE Bonus Report. It revealed a significant shift towards performance-based incentives rather than team-wide rewards, reflecting the increasingly competitive job market.
The most common bonus category consists of payouts equivalent to one to two months' salary, a strategy adopted by 44% of organisations.
"Despite financial improvements in sectors, nearly one in three employees did not receive a bonus in 2024. Companies carefully structured their bonus strategies to balance cost pressures with attracting and retaining talent," the report said.
Slightly more generous, 23% of firms provided bonuses of three to five months' salary, particularly in industries such as banking, consulting, and technology. Bonuses exceeding six months' salary were far less common, awarded by only 5% of companies.
"These substantial payouts were concentrated in banking and consulting, where total compensation heavily relies on performance-based incentives to align rewards with individual and company success," the report said.
Some sectors remained cautious with bonus payouts, as 28% of organisations chose not to distribute bonuses at all in 2024, a trend similar to 2023.
"Industries like aviation, government, media, and retail held back due to budget limits, shifting priorities, and market uncertainties. While aviation saw strong growth, bonus practices varied. Media adapted to digital changes, and retail faced shifting consumer demand, leading many companies to remain conservative with bonuses."
Who's Getting the Biggest Payouts?
The report highlighted a clear divide in bonus distributions across industries in 2024.
Banking and financial services led the way, with 10% of organisations awarding bonuses exceeding six months' salary, primarily aimed at retaining top executives.
The healthcare sector also saw strong bonus activity, with 50% of organisations offering between three and five months' salary.
This trend is largely driven by the UAE's investment in medical infrastructure and the need to attract top professionals, according to the report.
"Consulting followed at 38% as firms competed to retain experienced advisors in a rapidly evolving business landscape. The energy, utilities, and renewables sectors also saw notable payouts at 19%, highlighting the industry's push toward sustainability and the demand for skilled experts to lead critical projects."
Conversely, approximately 22% of government entities, 25% of logistics firms, and 27% of energy companies reported no bonus distributions for 2025.
"Retail and e-commerce also faced challenges, with 53% of organisations keeping bonuses in the 1–2 months' salary range. Rising costs and high turnover constrained their ability to offer more competitive rewards."
The report also highlighted the growing adoption of long-term incentive plans (LTIPs), particularly within banking, consulting, and real estate industries. These strategies are becoming increasingly popular to align leadership rewards with broader business objectives.
