TM - August 2008 - (Page 51)

population, domestic demand for real estate and services has boomed. Inﬂation was 10.1 percent in 2006, 10.9 percent in 2007 and is expected to be 7.3 percent in 2008. The population in Dubai is growing at a rate of 5.8 percent — the fastest in the world — and employment is rising at a rate of 8.3 percent. Faced with rapidly depleting oil reserves in Dubai, the government is looking to attract alternative sources of revenue and foreign direct investment, most notably in the trade, tourism and ﬁnancial services sectors. Meanwhile, the predominantly Western expatriate community is fueling rising demand for Western-style remuneration practices where beneﬁts, long-term incentives and lifestyle products are becoming increasingly important. The traditional focus on base salaries and cash allowances in the UAE appears to be shifting. Supplemental pension provision, for example, is becoming more widespread, particularly among multinational companies. Apart from Western preferences, the main reasons for this trend are the absence of social security beneﬁts and the lengthening average period of assignment for expatriates. Also, the government has sought to reduce dependence on the national health service by requiring companies in certain locations, such as the emirate of Abu Dhabi, to provide expatriates and their families with private medical coverage. Companies with more than 1,000 employees working in Abu Dhabi and companies in the Dubai International Financial Centre (DIFC) also must provide their staffs, expatriate or otherwise, and their families with private medical plans. Beneﬁts Under Pressure Clearly, the Mideast’s longstanding beneﬁt traditions are under pressure. In terms of retirement savings provisions, for example, expatriates only are entitled to an end-of-service indemnity paid by their employers, and this generally is based on a month’s pay for each year of service. Increasingly, this is viewed by expatriates as a poor level of beneﬁt compared to a pension plan. With the current intense competition for local talent, many companies are looking to provide top-up pension plans to attract and retain employees. While only 8 percent of multinational companies surveyed currently provide a supplementary pension plan in the UAE, 65 percent said they are looking to change their beneﬁt provision, including setting up supplementary plans. These plans are established on a deﬁned-contribution basis through offshore investment funds that often are associated with international pension plans. Since the UAE does not impose salary caps or tax restrictions to act as restraints on the design of local pension plans, this amounts to a blank sheet of paper for introducing new plans and a lot of ﬂexibility to be creative in meeting the needs of particular clients and sections of their workforces. The provision of supplementary pension plans across the Middle East varies by country, but the majority of multinationals in these countries conﬁrmed they DASHBOARD continued on page 55 talent management magazine www.talentmgt.com 51 August 2008 http://www.talentmgt.com

Table of Contents Feed for the Digital Edition of TM - August 2008

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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