GCC employers shift from cash to benefits to cut costs

Employers in the Gulf Cooperation Council (GCC) are shifting away from cash allowances to wider benefit offerings to retain staff, according to a study professional services firm Aon.

The company said its survey, which collected responses from more than 100 companies in the region during the February-April period, showed enhanced end of service benefits were now being offered by 35 per cent of respondents from 17 per cent last year.

There was also a 12 per cent increase in firms offering life insurance, 20 per cent increase in accidental insurance and 20 per cent increase in long-term disability insurance compared to 2017.

Aon said this represented a change from previous years, when organisations were “spending more aggressively” on cash allowances, and was reflective of aims to “optimise their costs”.

Other findings included a growing number of employers offering paternity leave, while maternity leave remained the most relevant ‘treatment’ covered under medical benefits.

Standard working hours in the region were found to be 48, with a maximum of 25 vacation days a year.

Executives and management level professionals were found much more likely to receive education assistance (83.5 per cent) than lower level staff but less likely to receive overtime (10 per cent) than those at support level (50 per cent).

In contrast, nearly two thirds of firms provided executive management with a relocation allowance compared to 34 per cent for those in support roles.

“The results of this study are particularly interesting, as they demonstrate how organisations are looking at and leveraging allowance and benefits structures to secure and retain the right talent with the right skillsets to help drive their business objectives,” said Aon Middle East and Africa talent, rewards and performance CEO Christopher Page.

Read: Why CEO involvement in employee benefits can boost company health in UAE

Dubai bank Emirates NBD said in a report released this week that UAE non-oil private sector employment fell for the first time since 2009 last month as firms sought cost savings and efficiencies.

Read: UAE non-oil sector employment declines for first time since 2009

Job creation in year-to-date terms has been weaker than last year, according to the lender.