Housing allowances in the UAE up roughly 4% in 2016 – report

Companies in the United Arab Emirates have increased allowance and benefits allocations this year, although the growth is slower than previous years, according to a new report.

The report by talent consultancy Aon Hewitt found that overall allowances and benefits are up 5 per cent year-on-year across the Gulf region.

However, the increase is about a third of that seen in previous years across areas such as housing, transportation and education allowances.

Housing allowances in the UAE have increased an average of 4 per cent across all job roles, ranging from Dhs 43,000 for junior professionals to Dhs 225,000 for senior executives, the report stated.

Meanwhile the education assistance allowance is up 5 per cent, averaging at Dhs 25,000 for eligible junior professionals and Dhs 58,000 per child for senior managers and executives in the country.

However, the report clarified that the rise in allowances is partly because of a few organisations doing a market correction rather than an overall increase across the board.

Also read: Almost 50% of UAE workers didn’t get a pay hike in 2015

While companies are eager to attract and retain global talent, they are spending more selectively in line with the overall tone of the macroeconomic environment, it added.

Compensation Survey manager at Aon Hewitt Middle East Robert Richter 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.”

Also read: Revealed: Top 10 salaries in the UAE

Salaries in the UAE are set to rise by an average of 4.6 per cent in 2017, down from an average increase of 4.9 per cent this year, a recent report by advisory firm Willis Towers Watson found.

The reduction in the pay hike is a result of the shifting economic conditions globally and regionally, that has impacted pay and benefits, explained senior consultant and Data Services lead for the Middle East at Willis Towers Watson Laurent Leclère.

“With the drop in oil prices, the region has diversified its economy to reduce its dependence on oil. On the other hand, the region continues to demonstrate great stability in continuing to develop other verticals such as tourism, hospitality and education,” he said.

Read more: UAE salaries to rise 4.6% in 2017, down from 4.9% in 2016