DUBAI: Blame it on macroeconomic environment, companies in the UAE and Saudi Arabia are increasing their spending on employee allowances and benefits as one of the slowest rates in recent years.
The human resources and consulting company, allowances and benefits this year increased by 5 percent year on year, slower than in previous years, The National quoted a report by Aon Hewitt.
This increase represents about a third of that seen in previous years across areas such as housing, transport and education allowances, the report said.
In the UAE, education allowances reportedly increased by 5 percent and ranged from Dh25,000 per child for junior executives to Dh58,000 for senior managers.
Housing allowances rose by an average of 4 percent. These ranged between Dh43,000 and Dh225,000 in the UAE, said the news portal.
The report said companies are still keen on attracting and retaining talent from around the world. But they are also spending conservatively.
Aon Hewitt said that “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”.
Trefor Murphy, chief executive of Cooper Fitch, a recruitment consultancy in Dubai, said it is hard to say if all companies in the UAE are reducing their employee benefits.
He reportedly said companies that are not increasing their allowances are mostly in the oil and gas and finance sectors.
But there are other areas of the economy that are doing well despite the decline in oil prices, such as health care, fast moving consumer goods and IT.
“In Saudi Arabia, there are organisations that are booming and attracting talent from all over the world. Consultancy firms such as management consultants and tax specialists are growing exponentially,” Murphy was quoted as saying by The National.
Murphy reportedly said there will be significant growth in the next two to three years triggered by Expo 2020 in Dubai. “We see 2016 as a flat year overall in terms of job creation, 2015 was a minus year as well, but [from] 2017 demand will pick up all the way to 2020.”
