‘CUT­TING BACK ON STAFF BEN­E­FITS IS COSTLY’

Com­pa­nies warned over staff ben­e­fits

7 Days in Dubai - - FRONT PAGE - shoshana@7days.ae

Firms cut­ting back on their em­ployee al­lowances face los­ing out when it comes to hir­ing or keep­ing the best ta­lent, the au­thor of a new salary study has said.

At a time when busi­nesses are try­ing to economise, hu­man re­sources and con­sult­ing firm Aon He­witt said there was a no­tice­able drop in the growth rate of em­ployee ben­e­fits across the UAE, with ben­e­fits cut by a third due to the global down­turn in oil prices.

Em­ployee ben­e­fits grew by 5 per cent in 2016 com­pared with a 10-15 per cent rise in pre­vi­ous years, the Al­lowances and Ben­e­fits Sur­vey said.

“Such in­vest­ments are still an in­cred­i­bly im­por­tant con­sid­er­a­tion for com­pa­nies look­ing to stay com­pet­i­tive with in­creased in­vest­ments seen across the board,” said Robert Richter, the Com­pen­sa­tion Sur­vey Man­ager at Aon He­witt Mid­dle East.

“What it takes to at­tract peo­ple to the UAE, is not just ba­sic salary any­more, it never was ac­tu­ally, a big com­po­nent is also al­lowances.”

Richter said in or­der to at­tract ta­lent from abroad where they tra­di­tion­ally don’t have to pay school fees, you have it make it worth their while.

“In or­der for an em­ployee to travel abroad and leave their friends and fam­ily, you have to of­fer ben­e­fits that cor­re­spond to the cost of liv­ing,” he said, point­ing out that steep hikes in school fees that rose by nearly 6.5 per cent in 2016, made the UAE the most ex­pen­sive place to ed­u­cate your chil­dren in the GCC.

He said this has prompted more em­ploy­ers to in­clude an ed­u­ca­tion pack­age in job of­fers.

“In the past, ed­u­ca­tion ben­e­fits were for ex­ec­u­tives and man­agers only but com­pa­nies are well aware of the fact that school fees are a huge bur­den for pro­fes­sion­als so you’ll see that roughly

half of the or­gan­i­sa­tions in our study of­fer pro­fes­sional ben­e­fits as well.”

Richter said cut­ting pro­fes­sional perks could also prove more costly over­all than a 5 per cent in­crease in an ed­u­ca­tion al­lowance.

“The cost of at­tri­tion of hir­ing and im­port­ing ta­lent is much higher than a 5 per cent in­crease in al­lowances and ben­e­fits,” he said.

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