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19 March 2024

Will your UAE employer hike your allowance this year?

Published
By Shuchita Kapur

There’s good news for UAE parents reeling under the pressure of rising school fees. According to a new survey by Mercer, companies in the UAE – in Dubai and Abu Dhabi – are planning to start giving or raising school allowance as part of their employees’ overall pay package.

Nearly a quarter of all companies in Dubai aim to raise their schooling allowance for employees in the coming year, with one in five of those in Abu Dhabi intending to do the same, according to the human resources consultancy.

Mercer polled 147 organisations to establish their remuneration aims for 2014, with the responses received indicating that 24 per cent of companies in Dubai were considering raising the schooling allowance for their employees this year, and 19 per cent of companies in Abu Dhabi reporting the same aim.

However, further polling in the survey revealed that only 61 per cent of Dubai companies intended any increase to be for all employees, whereas 85 per cent of organisations in the capital replied that rises would be across the board.

“In light of the continued improving economic conditions across the UAE and the revitalising of the region’s housing market, we aimed to establish how employees were likely to fair with regards to aspects of their remuneration,” said Nuno Gomes, Information Solutions Business Leader Middle East, Mercer.

“Our Spot Survey on Housing and Schooling Allowances Increases in UAE revealed that there was a greater percentage of organisations in Dubai than Abu Dhabi who claimed to be considering school allowance increases. However, those companies in the capital that were considering rises were applying them to more categories of workers,” he added.

The Mercer survey also revealed the schooling allowance raises made in 2013 by the organisations taking part, with 13 per cent of the Dubai companies giving increases compared to a figure of almost half that – seven per cent – from those in Abu Dhabi.

Although the number of companies giving hikes in 2013 is considerably less than those looking to offer hikes in 2014, the average increase was higher last year. On average, in 2013 increases were 15 and 16 per cent in Dubai and Abu Dhabi, respectively, whereas in 2014 forecasted increases are 12 per cent in Dubai and 10 per cent in Abu Dhabi.

Previous surveys have highlighted that a section of UAE parents are finding it hard to cope with the ever-increasing school fees and many would switch schools if fees are increased any further.

A survey carried out by SouqAlMal showed that 78 per cent of parents disagree with the recent approved fee hike and see it as an added burden on them.

Parents believe that continuous increase in fees can cause changes in the financial circumstances of many families and quite some disruption to their child’s education.

Approximately 33 per cent of those surveyed by Souqalmal would consider the change only if the increase was significant enough to disrupt their finances and put them in a difficult position.  Such results could indicate concerns over the increasing cost of living in the UAE.

The Education Cost Index (ECI) determines percentage increase in fees. ECI measures average operating cost of a school and is calculated at 1.74 per cent for 2014-15 academic year. This means, after inspections by the Dubai School Inspection Bureau, schools rated as “outstanding” can increase fees by 3.48 per cent. Schools rated “good” can increase by 2.61 per cent and those rated lower can increase fees by 1.74 per cent. The fact remains, that these increases are still below the cap set by Dubai Executive Council but are needed to help sustain the operations of schools.

An earlier survey by website Which School Advisor showed that almost 9 out of 10 parents (87 per cent) claim school fees cause financial stress for themselves and their family. Only 5 per cent of respondents to that poll had the entire school fees paid by their companies, with another 15 per cent getting various levels of contribution.