Nearly a third of employees in the UAE can expect a housing allowance increase of more than nine per cent this year, new research showed.
In a survey conducted by Mercer among 147 organisations, it was found that 41 per cent of companies in Dubai and 24 per cent of those in Abu Dhabi have plans to raise the housing allowance for their staff.
The companies are considering an increase to help their employees cope with the rising cost of living. Mercer said the forecasted increase is 9.8 per cent in Dubai and 9.5 per cent in Abu Dhabi.
“The figures suggest that 22 per cent of workers in Abu Dhabi and 33 per cent of [employees] in Dubai can expect a housing allowance increase this year — 28 per cent of employees in the two emirates combined,” the human resource consulting firm said in a statement.
Rising rents are a cause of concern for many workers in the UAE. Over the last two years, rents in Dubai have gone up by 15 to 30 per cent per year,  depending on the location.
However, an increase of less than 10 per cent won’t be enough to offset the rising costs.
“Organisations are still reacting moderately and cautiously to these market increases,” said Nuno Gomes, information solutions business leader Middle East, Mercer. “It would appear that an increase in housing allowance of 9.8 per cent may not be sufficient to cover actual increases in rents.” However, it is rare these days that companies cover rent totally except perhaps for the most senior staff.
“I suppose then that having something additional is an improvement on having no increase at all from the employer,” added Steve Gregory, managing partner at Holborn Assets.
Housing allowances vary depending on the level of position. A worker earning Dh4,000 a month may earn about Dh14,000 a year for accommodation, while at the executive level, the remuneration can reach Dh200,000 a year.
“Generally speaking, it is usually a 60:40 split between basic and living allowance,” said Helena Houia, principal consultant at Talent2. “The living allowance usually includes transport and housing and is a 30:70 split [30 per cent transport and 70 per cent housing].”