In the face of exploding rents, how much do UAE companies provide in housing allowances?
Housing allowances in the UAE range between $20,000 and $53,000 per year, according to a new survey.
The latest GCC Allowances and Benefits Survey conducted by talent firm Aon Hewitt ME, found that Qatar has the highest housing allowance, ranging from $21,000 to $53,000 per annum, while Oman has the lowest, with the start range at $13,000 and a maximum of $44,000.
The survey also shows that housing allowance is 25 per cent of basic pay across most GCC countries, however this goes up to 30-40 per cent in the UAE and Qatar.
Housing allowance has remained stable despite a rise in rental rates across the region, the survey said. Companies are however introducing new measures to increase their budget allocation to accommodate the rise in the cost of living, it added.
“It is clear that inflationary pressures are being felt throughout the GCC and companies are starting to rethink their allowances and benefits allocation strategy,” said Robert Richter, Compensation Survey manager at Aon Hewitt Middle East.
The most commonly provided allowances and benefits in the GCC are housing, transportation, children’s education assistance and home leave benefits.
Housing and transportation allowances are typically provided as cash payments on a monthly basis but children’s education assistance and home leave benefits are given at the actual cost of the school fee or ticket.
Tickets to the country of origin are given once a year for the employee, spouse and children, the survey found. Some companies do reimburse the ticket as a monthly cash payment based on the average cost of a ticket.
Allowances across the region are typically provided based on seniority, with the amount varying by up to 100 per cent, based on employee category.
But despite the inflation, salaries seem to have dropped, according to the Gulf Business 2014 Salary Survey.
This decline, from $10,611 a month in 2013, to $10,392 a month in 2014, came as a result of lower average salaries for Western and Asian expatriates submitted by recruiters.
Western salaries were down 6.8 per cent, averaging $11,385 a month across all positions measured compared to $12,216 last year. Asian average wages were down 4.27 per cent, standing at $8,673 a month compared to $9,060 in 2013.
“Over the last two to three years, as people are leaving, companies are taking the opportunity to hire the same standard of worker but at slightly lower salaries,” said Ian Giulianotti, associate director HRM Consulting, Nadia, which participated in the survey.
Cost sensitivity was a major factor cited by several of the participating recruiters, with companies still engaging in restructuring and outsourcing to reduce overheads.