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Companies in UAE & KSA revise spending on employee allowances and benefits
Overall allowance and benefits allocations in 2016 are up 5% year on year, but growth is less than in previous years as market corrections are made

Middle East - 11 July 2016: According to the latest GCC Allowances and Benefits Survey conducted by Aon Hewitt—the global talent, retirement and health solutions business of Aon plc (NYSE: AON)—companies in both the UAE and Saudi Arabia have reviewed their allowance and benefits packages in 2016 with most organizations spending more conservatively compared to previous years. While companies in the region are still spending about five 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.

Experts at Aon Hewitt note that 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 macroeconomic environment. The 2016 increase in allowances is in part explained by a few organizations 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 organizations today is the most appropriate placement of the workforce, as well as driving achievement-based reward schemes in the workplace.

The largest report of its kind in the GCC, the Aon Hewitt Allowances and Benefits Survey is based on an analysis of over 100 multinational companies and locally-owned conglomerates across different sectors. While the full survey provides detailed information across employee groups, individual countries and benefit categories, some of the top-level findings revealed that:

  • Education assistance allowance has registered an increase of 5 per cent, and in UAE now ranges between AED25,000 for eligible junior professionals to AED58,000 for senior managers and executives per child across job roles.
  • Housing allowances in the GCC have increased an average of 4 percent across all job roles, ranging from AED 43,000 for junior professionals to AED 225,000 for executives in the UAE specifically. 

Robert Richter, Compensation Survey Manager at Aon Hewitt Middle East, said: “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. 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.”

To purchase the full report please contact Aon Hewitt on: (971) 43896300.

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For further information: Danielle Doueik +971 4 237 8054 danielle.doueik@edelmandabo.com
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