TM - August 2008 - (Page 50)

dashboard by Rebecca Powers and Callum Burns-Green Mideast Meets West Western-style pay and beneﬁt practices are increasing in the Middle East according , to Mercer’s 2008 regional survey of practices and plans in multinational companies. Fueled by growth in expatriate populations, more long-term incentives and lifestyle beneﬁts deﬁne the trend. The timeless landscape of the Middle East is a study in transformation these days. The latest oil and construction boom propels the growth of 21st-century Xanadus — such as Dubai and Abu Dhabi in the United Arab Emirates and Riyadh, Saudi Arabia — while the economies of Egypt and Israel continue to evolve. From a workforce perspective, the change is profound, with a signiﬁcant increase in multinational companies and a steady rise in the number of expatriate employees. A key result is a rise in Western-style pay and beneﬁt practices. The sands of the region’s traditional compensation and beneﬁt practices have shifted since 2003, when Mercer conducted its ﬁrst survey of beneﬁts and HR practices in the Middle East. The Middle East beneﬁts survey for 2008 covers seven countries: Bahrain, Egypt, Israel, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates (UAE), with responses from 45 multinationals, representing 15 industry sectors, more than 500 beneﬁt plans and 61,000 employees in the region. The survey shows the traditional focus on high basic salaries and cash allowances is shifting toward long-term incentives and protection beneﬁts such as pensions and medical, life and disability insurance. Additionally, lifestyle beneﬁts such as company-car allowances and leave entitlements are increasingly important, while allowances for housing, transportation and education remain popular. These changes in beneﬁt practices are being driven by the continuing increase in multinational companies August 2008 based in the region, an expansion of the expatriate workforce — some 85 percent of Dubai’s population is expatriate — and greater mobility of expatriates between jobs. In the UAE, changes in legislation also have strongly contributed to the trend. The Expatriate Boom The change in pension practices in particular is driven by workforce mobility, as many expatriates are choosing to stay long term or permanently relocate. Expatriates in most of the Gulf states have no statutory entitlement to local state pensions, and local job moves generally result in the loss of membership of their home-country pension plan. This has prompted an increase in employer-provided supplementary beneﬁts. In particular, the recent relaxation of UAE employment law has made it easier for expatriates to move to other jobs in the local market. In the past, expatriates would commonly stay for three-year assignments and then return home. Now many choose to move on more quickly to other positions in the region. According to Mercer research, the UAE recently has experienced some of the strongest gross domestic product (GDP) growth in the Middle East, which has been fueled by domestic and foreign investment in both its oil and non-oil economies. The GDP growth rate was 8.9 percent in 2006, 8.2 percent in 2007 and is expected to be 7.5 percent in 2008. With an increasing expatriate population that comprises approximately 80 percent of the Emirates’ entire 50 talent management magazine www.talentmgt.com http://www.talentmgt.com

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TM - August 2008 Editor's Letter Contents Human Performance Leading Edge Foundations Global Background Screening Does Global Assessment Work? Global Total Renumeration: Creat One Organization Border Insecurity: Immigration Reform and Talent Management The Global Workforce: Communication Across Cultures Around the World in How Many Days? Insight: Exelon: Performance Under Pressure Special Report: Perspectives on Managing People Application: Reinventing Sales Rewards at Motorola Dashboard: Mideast Meets West Dashboard: Mergers and Acquisitions 2008 - Don’t Leave Employees Behind Editorial Resources Advertisers' Index Full Potential

TM - August 2008

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