The importance of employees’ wellbeing has increased for many throughout the Covid-19 pandemic. As businesses move forward towards a new age of work, and requests for more flexible working conditions begin to rise, employers that can offer flexibility and autonomy to their employees will give themselves an edge on their competitors.
When attracting talent, more businesses are recognising the benefits of making long-term provisions for their employees and that ensuring the wellness of staff, can result in increased productivity and better employee retention.
Generally, employers are looking to attract and retain employees and may tailor their benefits and compensation packages to match those being offered by their main competitors, so finding that something extra that will entice that special employee is worth looking for.
Many companies continue to provide traditional benefits (healthcare, pensions, death in service) which of course have their place, but with multiple generations in the workplace are these really working for your population? There are many alternatives, which for example could provide an opportunity to save for a house deposit for those looking to get on the property ladder.
Another example is access to emergency childcare whereby an employer could offer x number of days per year for a reputable agency, which for those who need this its value probably outweighs the cost. There are lots of options available and it is important for employers to think outside the box, especially in a competitive market.
Employers are generally getting better in educating and communicating the benefits available, using technology is a quick win and provides employees with self-service functionality at the touch of a button. This is key to engagement and provides a simplified way for employees to interpret the benefit value available to them. With generation Z’s in the workplace this is a minimum requirement!
Employers that provide benefits as part of a remuneration package are succeeding. But providing poor performing or poorly structured benefits can be as bad as providing nothing.
From a global perspective, in many locations employees have gained more protection as businesses are encouraged to be responsible employers. TMF Group’s Global Complexity Index examines the differences in the rules and requirements for doing business in 77 jurisdictions around the world. Its analysis clearly presents a shift as industrial relations are now becoming more employee focused than ever before.
Employees are the main asset of every business
In Denmark, the revised Working Environment Act (updated May 2020) ensures that the physical and psychological environment for employees is both safe and suitable in line with this shift toward a more employee-focused workplace. By way of verification, the index also revealed that 48 percent of the 77 jurisdictions, have made it a legal obligation to offer a pension fund to employees.
A well-structured pension/savings plan, with a potential contribution from the employer, linked to risk graded investments, held in a trust for each employee and overseen by an independent trustee and administrator is gold dust. People are the main asset of every business and they should be looked after and monitored in the same way as financial assets.
In the UAE, a new labour law took effect on 2 February 2022, designed to put the onus on employers to provide better provisions for their employees wellbeing and future wealth. The Law included many new guidelines to safeguard employees in the workplace, and also highlighted the continuous requirement to fund for end-of-service gratuity (EoSG) payments – Federal Government and Private Sector employees entitled to end of year gratuity, equal to 21 days per year up to five years and 30 days for each subsequent year (not exceeding two years base salary).
As yet, there is no mandatory requirement to safeguard the employees end-of-service gratuity accruals. However, due to the benefits to both employers and employees, many businesses are seeking out options to implement funded schemes to position themselves more competitively in the market.
This would include a solution where a Master Trust is established in the name of the employer and each employee’s end-of-service gratuity contribution would be linked to a specific account and held in Trust for them. In addition, the employee can make additional savings, which the employer can chose to match in-full / part-payment / not participate, as each scheme can be tailored.
The benefits are multiple for both employer and employee. For employees, they have the option to review the end-of-service gratuity and savings via a personal portal which also allows them to make investment choices and increase or reduce savings levels.
With this best-in-class solution, an employer can be reassured in the knowledge that their employees savings are safeguarded as the EoSG payment is protected, should the company hit difficult trading conditions. Additionally, the employer will not hold the “cash position” on their balance sheet as is the current situation.
The other changes to the Law included improvements to holiday, maternity and parental leave policies, protection against bullying, discrimination and harassment, amendments to working hours and overtime and equal pay for men and women in the workplace. These will apply to all UAE private-sector employers onshore and within the free zones, with the exception of DIFC and ADGM who have their own Employment Law in place.
Stewart Adams, Managing Director, TMF UAE.
Follow us on
