Are Expat Incentive Packages a Thing of the Past?

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Are Expat Incentive Packages a Thing of the Past?

For some years any employee who was asked by their employer to transfer overseas, or who was headhunted by a foreign/international business, would expect the deal to come with some significant perks.

As well as a basic salary, skilled workers moving to places like China and the UAE could often expect to have a joining bonus, salary compensation, relocation/moving costs met, family medical insurance paid for, company car, children’s international school fees paid for, rent allowance, airfare for tickets home, and, in extreme cases companies would even fork out for things like domestic helpers.

However, according to a recent survey conducted by Emirates 24/7 such expat packages are on the verge of extinction in the UAE.

The survey showed that 92 per cent of participants no longer expect payment beyond their monthly salary/rent and transport allowance.

62 per cent of respondents receive no help from their company when it comes to paying their children’s international school fees, and only 13 per cent now get all of their child’s school fees paid.

A separate survey conducted by jobs portal Bayt.com discovered that of those UAE expats who still receive benefits on top of their salary, 50 per cent got personal medical insurance, 46 per cent got personal annual air fare and 33 per cent got gratuity.

According to one recruitment specialist: ‘Expat packages were initially designed to attract expatriate executives to move to the region for a certain period of time, like three years, and were designed to attract top talent [...] Such packages to this region were created at a time when the Middle East was considered a ‘hardship assignment’ and were designed to be more lucrative than the standard compensation’.

But times have changed.

The UAE has become a thriving commercial hub and increasingly companies are sourcing staff from an ever enlarging local talent pool. Local experience is also becoming a standard requirement.

On the whole, employers are asking for perspective employees to have greater cultural awareness and local understanding, so enticing fresh expats is becoming less important than attracting existing expats in the region.

As industry expert Gareth Clayton observed: ‘It can really depend upon the type of employer and the nature of the job. Typically and from our perspective, a lot of hiring has become regionalised; whereby businesses what to recruit people from within the UAE or the region. This form of hiring doesn’t always deliver your comprehensive packages linked to being an expatriate as people can be perceived as being local hires.’

But don’t let this news get you down; according to one industry expert the expat incentive package isn’t entirely dead. They state: ‘Expat packages are still around, yet vary from company to company. Companies also use expat packages to attract executives to the region to solve a certain business challenge.’

And while some companies might not offer their expat employees extensive benefits for the whole of their employment they may offer certain provisions to make the initial transition more affordable/comfortable.

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