8.07 AM Thursday, 18 July 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:12 05:36 12:28 15:51 19:14 20:38
18 July 2024

Expat salary packages come down in the UAE

By Shuchita Kapur

Companies in the UAE have reduced expat packages as recruitment plans have shrunk and firms are less willing to shell out more money as cost of living has gone down in the country.

“The appetite to fork out extra for special expat packages has gone down substantially compared to four odd years ago given the increased range of qualified and high calibre candidates already settled in the MENA region,” Hasnain Qazi, Middle East Business Manager at Huxley Associates told Emirates 24|7.

Companies in the country are also reluctant in hiring candidates from other countries, if an option is available locally, which further puts pressure on the kind of package expats can get. 

According to Qazi, “employers are more risk averse now, and where possible would prefer to hire individuals committed to the region already, from a corporate governance perspective and a saleability and continuity perspective. Special packages were common before the recession to lure candidates with niche experience / qualifications to what was then seen as a hardship destination. Now, however, the region, in particular the UAE is seen as lifestyle destination of choise, free of tax, crime and general social gloom.”

As per a recent poll by Bayt.com, many professionals in the country believe that expat offering are down. “[Our poll] on ‘Expat Packages in the Middle East’ showed that that 35 per cent of employees in the Middle East say their companies are still giving special expat packages while 44.9 per cent say they are not, with 45.3 per cent who think that special GCC expat packages are over,” said Amer Zureikat, VP Sales at Bayt.com.

However, some experts believe that expat packages have not changed substantially over the past couple of years.

“We distinguish between two types of expatriates: Type 1: Expatriates who are sent to UAE by their HQ for an assignment. Typically, such assignments range between 1 to 3 years and the company usually has an obligation to re-patriate such employees back. Type 2: Expatriate (foreign) employees that are hired by UAE-based companies directly and they are typically on a local contract. For both types, companies provide typical expat packages that cover: base salary, benefits, housing, transportation, school allowances, etc.  Type 1 may also be entitled for banking allowance, tax advice services, home-country social security contribution, spouse support, etc,” explained Larisa Muravska, Partner at Mercer Consulting Middle East Limited.

“Our data does not indicate a decrease in the expatriate packages. However, some companies are pondering with a question whether they should decrease housing allowance as the rental fees continue to go down. However, the companies are reluctant to do that as good quality employees are hard to get and companies should be able to offer competitive Total Remuneration packages in order to attract and retain talent.

“What we have observed is that the packages for UAE nationals are increasing as companies compete for local talent among themselves and also with the government which provides quite generous allowances and benefits,” she added further.