Retirement and savings plans for all employees are becoming more common in the Middle East region, with close to a third of organisations in the area offering such benefits, according to new research.
Towers Watson’s End of Service Benefits in the Middle East 2012 survey showed that almost half of companies that offer a retirement or savings plan now offer the same plan to all employees.
This compared to last year when it was more common to limit eligibility, with only a third offering the same plan to all employees.
The research also showed that while retirement and saving plans are already commonly offered in the UAE, their prevalence is only now increasing in Egypt, Oman, Qatar and Bahrain.
Ahmad Waarie, managing consultant for Towers Watson Middle East, said: “In the last five years we have seen growth in supplementary plan provision in the region generally.
“In Egypt specifically our research indicates that around half of participating multinationals now have a supplementary pension plan in place.”
The Towers Watson survey also showed an increase in popularity of providing enhanced end of service benefits (ESBs) in the Middle East region.
While the number of companies offering enhanced ESBs hasn’t changed in comparison to previous years, more companies (65 percent) are now providing benefit enhancements to all employees as opposed to limiting eligibility to local nationals or top management only.
Waarie said: “Given the continuing global slowdown and the recent focus of many companies away from spending money on employee benefits, the fact that more organisations appear to provide enhanced ESBs is certainly encouraging news.
“The main reason companies offer benefits enhancements is that it is local or industry best practice but key talent retention is an important third reason. Organisations in the Middle East have come to realise that to attract and to keep the most talented employees, they have to offer more than just mandatory benefits.”
The research shows that many organisations based in the Middle East not only provide enhanced ESBs when employees retire, but the vast majority (82 percent) now provide enhanced ESBs when an employee’s contract is terminated, compared to only half last year.
In addition, over three-quarters provide enhanced ESBs if employees resign, an increase from 40 percent last year.
The research said most organisations (92 percent) now give an enhancement to mandatory benefits at retirement in comparison to around three-quarters a year ago.
Waarie said: “While most organisations continue to raise cash from the company assets, they should consider at least partly funding these benefits externally as far as possible, as this can achieve greater security for employees and potentially lower costs for employers.”
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