How to Build an Employee Benefits Package
Gone are the days when employees would work for a company that pays a salary and perhaps a bonus. Today’s workforce want more tailored benefits. Work is more integrated into our day-to-day living than ever before. Culturally we’ve evolved as workers. Therefore companies who keep their talent engaged by offering more comprehensive benefits are likely more successful in their sectors.
The work comes down to HR to create the benefits package that suits the business needs and culture, vision of growth, and is not only in tune with the talent market’s needs, but also ahead of the competition.
The basic benefits are a good starting point. This includes not only a competitive salary and monetary incentives, but also other valuable add-ons like medical insurance and a good pension contribution. Then look broader.
Mandatory and standard UAE benefits
In the UAE, employers must include certain benefits mandated by Labour Law, and standard benefits offered to employees.
1. Social Security – Employers must contribute 12.5% for Emiratis. This does not apply to expat employees.
2. Special holidays – During Ramadan, the workday is two hours shorter. Additionally, the UAE celebrates seven public holidays, entitling employees to 14 days of leave on top of normal leave entitlement.
3. Paid leave – If an employee has work at least one year at a company, the employer must grant 30 days of paid leave annually to the employee.
4. Work and residency permits – Employers must arrange and pay for employees’ work and residency visas where applicable.
5. Health insurance – Employers are required to provide health insurance to employees in the UAE.
6. Gratuity – This is the UAE pension equivalent and is calculated on basic salary and tenure at the company. Check out our blog on UAE Labour Law for more information on UAE gratuity.
Other common benefits employers can offer that isn’t legally mandated as part of the UAE Labour Law are:
• Housing or housing allowance- Employers can choose to give employees a monthly allowance to cover accommodation costs, or provide accommodation for the employee and their family to reside in, which is usually owned and managed by the company.
• Employer-subsidised tuition fees- This is a very common benefit if the employer is a school or in education, and they will allow one or more of the employee’s children to attend the school for free or for a discounted amount off the tuition fees.
• Employee saving schemes- Employees can contribute a portion of their salary each month into a dedicated saving account, managed by the employer, where the employer will also contribute the match amount or similar into the account and the employee can withdraw at anytime.
• Roundtrip plane ticket to employees’ home country annually.
Before diving into packaging your company’s additional benefits, consider the workforce trends because these would inform you of what employees really want.
Workers increasingly seek a sound work-life balance. The worldwide lockdowns during the Covid pandemic brought the value of that home to employers and employees alike.
Workplace stress, anxiety and depression are all certain roads to burnout from which no one benefits. One statistic shows that in one year, these can lead to 13 million working days lost.
Therefore, prioritise wellness in the workplace when you design a benefits package.
2. Hybrid workspace
Covid proved that almost any work can be done remotely. What employees want most is the flexibility to choose. Some like to work in the office, others prefer their home office. And some like a combination of the two. The choice in itself is considered a benefit by most employees, and if a company can assist in the setting up of an ergonomic home-office space, even better.
3. Coaching and mentorship
Collaboration is important to the 21st Century employee. Learning from colleagues, getting cross-skills experience and exposure, and personal mentoring or career coaching are all in the list of things employees want from their employers.
4. Delivery of the benefits
Increasingly companies must deliver benefits to a diverse range of workers. Some employers are exploring schemes where they issue benefit credits that an employee can spend on specific benefits. This places the power of choice back with the employee. Whatever your company chooses to do, always communicate new or changed benefits clearly and timeously to the existing and prospective workforce.
5. Financial wellness
Employees appreciate companies that offer financial planning advice or tools as a perk.
The next steps
When you have done your homework on the wants and needs of existing and prospective employees, you can start building your program.
Step1: Know your budget – work out cost per benefit.
Step 2: Select the benefits most appropriate for your package. Remember that certain benefits are required by law to be included, and especially in the UAE, certain perks are offered as standard by most employees. So to remain competitive, include these and ensure your offering includes unique benefits that would make you a preferred employer.
Step 3: Analyse the total compensation package – how all compensation and benefits stack up.
Step 4: Analyse whether you require external resources for some of the benefits.
Step 5: Finalise the package, communicate and roll it out to employees.
If you would like advice or help on how to build employee benefits packages or help to restructure your employee’s benefits packages, Get in touch with one of our payroll specialists now for a consultation.