DUBAI, July 19, 2023 — Two thirds of employers (66%) in the UAE say that competition for talent is the joint most important factor that is reshaping how they approach workplace benefits like pensions and health insurance, while the other factor is rising costs (also 66%), according to research from WTW, a leading global advisory, broking, and solutions company.
These two issues were far ahead of the third most important factor, which was flexible work arrangements (32%), and reflect a tension facing UAE employers: they need to offer a competitive benefits package to attract and retain staff, but it is becoming more expensive to do so, and many are looking for savings.
The findings from WTW’s Benefits Trends Survey, a major global study of workplace trends, showed that to try and save costs, 85% of UAE employers have tried or plan to try to improve the terms of their contracts with benefits vendors. A quarter (24%) have secured additional budget for their benefits scheme, and half (49%) plan to do so.
However, some have had no choice but to cut benefits or spread the costs. Almost a third (31%) have either reduced the generosity of their benefits offering, or plan to do so. And four in ten (40%) have increased employee share of costs, or plan to do so.
The research showed that 70% of UAE employers said health benefits was a top three priority for their reward strategy. Half (52%) highlighted training and development, and 43% said insurance-related benefits.
Steve Clements, Senior Director, WTW UAE, said: “Employers are in a difficult position. They need to recruit and retain the best talent, so they have to keep their benefits attractive. But at the same time inflation is putting a lot of pressure on benefits budgets, and many are looking for savings.
“It’s a fine balance between making benefits operations more cost-effective, while offering a competitive package that is tailored to the individual needs of the workforce.
“This is especially challenging when employees are demanding increasingly comprehensive benefits which support key areas like healthcare, wellbeing, lifestyle, and financial protection.
“It’s important that employers can understand what their staff are looking for so that they are able to differentiate, refine, and communicate the overall benefits package.”
The Benefits Trends Survey 2023 examines the future direction of an organisation’s benefits strategy, how innovative solutions are used for old and new challenges, and how employers are changing and adapting their benefits design, financing, administration, and analytics. It drew 5233 participants globally, representing 22.9 million employees.
In the UAE, WTW surveyed 44 organisations between March and April 2023.
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