UAE companies are seeking to revise spending on employee allowances.
According to a latest report by Aon Hewitt, a company into talent management, companies in both the UAE and Saudi Arabia have reviewed their allowance and benefits packages in 2016 with most organisations spending more conservatively compared to previous years.
While companies in the region are still spending about 5 per cent more on allowances and benefits year-on-year in 2016, the increase is about a third of that seen in previous years across areas such as housing, transportation and education allowances.
Despite the more muted spend on employee benefits, experts at Aon Hewitt say companies are still eager to attract and retain talent from around the world, but are generally spending more selectively in line with the overall tone of the macro-economic environment.
“The 2016 increase in allowances is in part explained by a few organisations doing a market correction rather than an overall increase across the board.
"There is also a heightened focus on training employees for greater productivity. One of the key concerns for organisations today is the most appropriate placement of the workforce, as well as driving achievement-based reward schemes in the workplace,” reads the report.
Here is what employees in the country typically get, and the revisions expected as per the report.
Housing allowance in the GCC, including the UAE, has increased an average of 4 per cent across all job roles, ranging from Dh43,000 for junior professionals to Dh225,000 for executives in the UAE specifically.
Education assistance allowance has registered an increase of 5 per cent, and in the UAE, it now ranges between Dh25,000 for eligible junior professionals to Dh58,000 for senior managers and executives per child across job roles.
“Overall allowance and benefits allocations are a reflection of the economic times, and in 2016 that remains to be the case. Such investments are still an incredibly important consideration for companies looking to stay competitive with increased investments seen across the board,” said Robert Richter, Compensation Survey Manager at Aon Hewitt Middle East.
“At the same time, companies have continued to rethink their allowance and benefits strategy in terms of eligibility, volume and overall salary fluctuations, with more conservative spending this year,” he added.
Looking into 2017, employees in the UAE are expected to get a pay hike of 4.6 per cent, according to an earlier released salary budget planning study by Willis Towers Watson.
For the region, Towers Watson projects an increase of 4.6 per cent on average. Lebanon will have the highest increase in pay growth (5.4 per cent), followed by Saudi Arabia and Kuwait (5 per cent each) and Qatar (4.8 per cent).