Is 'expat package' dead in UAE? Here are most outrageous ones
The ‘expat package’ or all things paid for, along with hefty bonuses and allowances, made a hasty retreat during the recession years, but even after a good three to four years, the so-called ‘free lunch’ is not available for employees looking to move here.
Those who are already in the city speak of the no-frills package that they are accustomed to now, and see no return to largesse being handed down from employers.
A recent poll run by Emirates 24|7 revealed that a majority (92 per cent) of the respondents in the city are just used to getting a salary at the end of the month, which only includes house rent allowance and transport allowance to work.
Recruitment experts in the country believe conditions that made companies pay expat packages to employees no longer exist, so the basic criteria that made employers dole out more money is not relevant today.
“Expat packages were initially designed to attract expatriate executives to move to the region for a certain period of time, like three years, and were designed to attract top talent or with hard-to-find skills to move from their home countries to a different region,” says Ash Athawale, Recruitment Manager at Reed Specialist Recruitment.
“Such packages to this region were created at a time when the Middle East was considered a ‘hardship assignment’ and were designed to be more lucrative than the standard compensation,” he tells Emirates 24|7.
Both these conditions have changed. Firstly, there is a huge pool of talent available in the country and the region, and an increasing number of companies are looking to hire candidates who have local experience and knowledge of the market.
According to panelists at the recently concluded London Business School seminar, cultural awareness, Arabic capabilities and regional understanding – the so-called soft skills – are now among the top recruitment criteria for companies in the Middle East who are placing greater value on cultural awareness and regional experience than they did previously.
These are qualities that are more on the mind of the employers, and are found locally, reducing the reliance on fresh expats coming from far away territories, on bigger packages.
“It can really depend upon the type of employer and the nature of the job. Typically and from our perspective, a lot of hiring has become regionalised; whereby businesses want to recruit people from within the UAE or the region,” Gareth Clayton, Director at Charterhouse Partnership, told this website.
“This form of hiring doesn’t always deliver your comprehensive packages linked to being an expatriate as people can be perceived as being local hires,” he said.
Many companies are now doing away with schooling allowance for their employees or only paying a certain portion of their total fee, which is considered a must in an expat pay package.
“If schools still believe there is such a thing as an ‘expat package’, then our school survey should go a long, long way to dispelling the myth. It exists (in Abu Dhabi more than Dubai or Sharjah), but it is fast going the way of the Dodo,” said a spokesperson of Which School Advisor, a website that helps parent decide on the school for their child.
The survey showed that 62 per cent of respondents get no help at all from their company, 24 per cent of respondents get a contribution from their company and just a lucky few – 13 per cent – get their kid’s entire school fees paid.
Another survey carried out by online jobs portal Bayt.com too shows that expat package is not the norm anymore. The findings show that a fifth of UAE respondents (20 per cent) receive their basic salary only, while 65 per cent receive their basic salary plus benefits.
A third (33 per cent) state that 51 to 75 per cent of their salary package is their basic monthly salary. Additional benefits received from UAE companies include personal medical insurance (50 per cent), personal annual air ticket (46 per cent), and gratuity (33 per cent) – and that’s it.
But what about schooling fees, cars and even utility bills?
“Expatriate packages typically cover an extensive array of living and housing allowances plus educational and family benefits combined with relocation and subsistence components,” says Clayton.
“By and large, the days of cumbersome housing benefits, utilities and premium packages are, for the time being, behind us. However, family benefits and perks are still apparent across the market linking to insurances, annual flights and schooling,” he elaborates.
However, expat packages are not entirely dead, and companies may still foot all or most of the bills of the employees to hire them, at least during the initial relocation period.
“Expat packages are still around, yet vary from company to company. Companies also use expat packages to attract executives to the region to solve a certain business challenge,” said Athawale.
What is an expat package?
To compare where you stand in the order of things, here is what an expat package can include:
Salary compensation: If employees pay a certain tax rate in their home countries, that tax amount is included in the package, which ultimately results in more savings for the individual employee. So, the employee need not worry about local taxes or taxes in their home countries when working and earning in a foreign location.
Relocation & moving costs: This includes moving of personal goods and effects from the home country to the region using global packing and moving companies plus use of storage facilities for personal goods; fully furnished accommodation for a few months until the employee and the family can settle down; a company car (with fuel and Salik allowance paid for); and paid packing and moving at the end of the assignment.
Medical insurance: Health and dental insurance paid for the entire family.
Accommodation: Rent paid for by the company instead of being deducted from their housing allowance.
Transportation: Company car provided (with fuel and Salik).
Children’s schooling: School and transportation fees for children to be paid in entirety by the company.
Visit prior to moving to Dubai: A fully paid visit by the family before relocation to visit the schools and the destination city.
Joining bonus: A guaranteed bonus (at least for the first year).
Settling down allowance: Global companies offer their executives additional benefits such as paid access to tax advisors, real estate agents, localisation experts and visits arranged to the local schools for the spouse and children.
“During the crisis, expat packages became more like a relocation benefit which was a bit scaled down version of the expat packages. It all depends on what the employee has to offer and how much the company needs them,” says Athawale.
The most outrageous expat packages
If you think the above-mentioned points can be enough to hire talent, there’s more to it. During the best of times, some employees have landed even more benefits – that can aptly be called outrageous.
According to Athawale, there are more frills that can be added. “A few examples of outrageous ones are when the company is willing to pay for the visas and salaries for the domestic help and company driver.
“Companies have paid for four flights home every year. The company paid for the phone and the Internet bill as well as all international calls and even paid to relocate the employee’s pets,” he concluded.
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