More than a quarter of all workers in Abu Dhabi and Dubai are set to receive housing allowance increases in the coming year, according to a survey.

Global human resources consultants Mercer’s ‘Spot Survey on Housing Allowance Increase in UAE’ surveyed 147 organisations in the two emirates polled for their employee benefit intentions over the next 12 months.

About 24 per cent of companies in Abu Dhabi intended to raise the housing allowance for their employees this year, while 41 per cent of firms in Dubai intended to do the same.

Of the 90 companies in Abu Dhabi responding to an enquiry about which employees would qualify, those in the capital indicated that 91 per cent of their workforce would benefit, with Dubai-based firms saying it would apply to 82 per cent of their employees.

Nuno Gomes, information solutions business leader Middle East, said: “Our survey in the UAE revealed some interesting employee housing allowance intentions from the companies that participated.”

“I would venture that the well-reported rise in Dubai rents is the reason why companies there are considering an increase. Rental rates in Abu Dhabi have remained stable in comparison, at least for the past 12 to 18 months, so organisations in the capital are not under the same pressure to raise their housing allowance,” he added.    

The average forecasted increase for 2014 across organisations that are planning to increase their housing allowances is 9.8 per cent in Dubai and 9.5 per cent in Abu Dhabi.

“Although various reports point to steep rental increases in Dubai over the last two years, at rates of 15 to 30 per cent per year depending on the locations, organisations are still reacting moderately and cautiously to these market increases,” said Gomes.

The companies in Abu Dhabi increased accommodation remuneration by 15 per cent, which those in Dubai gave 25 per cent, he said.

The survey polled organisations across several industry sectors including high-tech (17 per cent), followed by energy (16 per cent), consumer goods (11 per cent), financial services (nine per cent), life science (seven per cent), durable (two per cent) and the ‘other’ category made up 23 per cent.

“Organisations in the UAE are now starting to face issues attracting and retaining talent due to the rise in living costs across the country, with the higher rental increases seen in Dubai leading to the city’s Expo 2020 win,” he added. - TradeArabia News Service