‘CUTTING BACK ON STAFF BENEFITS IS COSTLY’
Companies warned over staff benefits
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.