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Survey Middle East Companies Considering Benefits

April 22, 2008
Related Topics: Global Business Issues, Benefit Design and Communication, Retirement/Pensions, Latest News
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Employee benefits such as pensions and medical, life and disability insurance are gaining more attention in the Middle East as the number of multinational companies and expatriate workers in the region increases, according to a Mercer survey.

Multinational companies with employees in the Middle East are shifting from their traditional focus on high basic salaries and cash allowances to traditional benefits, as well as to lifestyle benefits including company car allowances, leave entitlements and allowances for housing, transportation and education.

According to the survey—the second of its kind by Mercer—greater mobility of expatriates between jobs and changes in legislation in the United Arab Emirates also are driving the trend toward employee benefits.

Multinational companies with operations in Bahrain, Egypt, Israel, Kuwait, Qatar, Saudi Arabia and the UAE participated in the survey.

Currently, few multinational companies surveyed are providing supplemental pension plans. In Qatar, none of the companies provided pension plans. In Saudi Arabia and Egypt, one respondent in each country provided the benefit. Two of the 25 participants in the UAE, three of the five participants in Israel, and two of the five participants in Kuwait provided pension plans.

Still, in the UAE, despite the low number of companies offering benefit plans, 65 percent said they were considering plans, according to the survey, which noted the low number of responses may not provide an accurate picture of the region.

As for medical benefits, 80 percent of multinational companies in the Middle East provide private medical benefits. Saudi Arabia and Egypt require private health care coverage. In Israel, however, only one of the five respondents said it provided supplemental medical benefits. Most companies in the UAE pay the entire cost of medical insurance. This is likely to change, though, as legislation introducing employee cost-sharing has been adopted. The UAE formerly provided a national health service free to all UAE nationals.

Almost all companies offer their expatriate employees in the Middle East additional varying perks and allowances, most of which are tied to housing, schooling and flights home. In fact, all survey participants provide allowances for return flights to expatriates’ home countries.

Filed by Kristin Gunderson Hunt of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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