More UAE firms offer better gratuity pay
45 per cent of UAE companies offer enhancements to end-of-service package
Dubai: Losing employees, or a high turnover rate, is bad for business. It just doesn’t have financial repercussions, it can impact employee morale. This is why organisations in the UAE are rethinking on the provision of end-of-service benefits (EOSB).
A growing number of organisations - mostly multinational or global - are beginning to realise that if they don’t offer better gratuity benefits, they are simply going to lose their top talent to their more generous counterparts.
The UAE has no mandatory pension system in place for foreigners, so the majority of expatriates who choose to go back to their home country and retire will likely have to rely solely on their gratuity to get by as they grow older.
Gratuity serves as a separation pay for employees at the end of their contract, but it is often deemed inadequate for retirement. The amount received depends on the staff’s latest basic salary and the length of service. Allowances and other compensation outside the basic salary are usually not included in the calculation.
Michael Brough, director and international benefits specialist at Willis Towers Watson, said the good news is that more companies in the UAE and the rest of the Middle East are enhancing their EOSB offering.
Read more
