Expats moving to Dubai can expect to receive help with relocation expenses such as housing, but employers’ overseas allowances will depend on home country living costs, explains Jenny Keefe
Luxury shopping, fine dining and year-round sunshine: it’s not surprising rising living costs have failed to deter the influx of expats to Dubai. Yet no matter how glamorous the destination, staff sent on assignment abroad still need plenty of help coming to terms with their new surroundings.
David Carey, international coordinator at Turner & Townsend, an international construction consultancy with 27 workers based in Dubai, says: “It is a very busy, cosmopolitan and developing city, which offers huge opportunities for employees.
“But it also offers many challenges, including the high temperatures, the multicultural society and the fast pace of change. Employees need to be able to demonstrate tolerance, patience, preparedness and adaptability to rapid change. It’s essential that employees know what to expect when they arrive,” he says.
The first few months in an overseas assignment are crucial. As with any relocation, employers offer perks to help smooth the transition: the cost of flights to Dubai, shipping belongings and temporary accommodation if required.
Theresa Wong, HR manager (Gulf network) at law firm Denton Wilde Sapte, says: “A typical expatriate package for staff relocating to Dubai would include a one-way airline ticket from their home country to Dubai for the whole family, a lump sum relocation allowance to move furnishings or buy new furniture, and an allowance for between 14 days’ and one month’s hotel accommodation, until permanent accommodation is found.”
The trickiest thing about a move to Dubai is finding somewhere to live. Most expats rent villas or apartments, yet prices have suddenly gone sky high. The average monthly rent jumped by 60% between 2004 and 2006, according to a 2006 report Pay, inflation and mobility in the Gulf by Middle Eastern recruitment firm GulfTalent.com. Janet Graham, a director at relocation specialists Sirva, says: “The population explosion over the last three years has resulted in an accommodation shortage.”
However, the good news is that competition should subside, with over 80,000 property units currently under construction. “When these come on to the market, the discrepancy between supply and demand should reduce,” she says.
On top of this, tenants have to put up one year’s rent in advance, plus a security deposit of 5% of the annual rent. Graham advises the employee (or employer) to have the deposit ready to pay in cash as landlords expect payment immediately.
Many employers offer a relocation allowance to help with costs. “For international expatriates employed on a two-to-four year assignment, accommodation has traditionally been leased and paid for by the employing company. In recent years, some organisations have slightly changed this process and moved towards offering lump sum packages, so expatriates can source their own accommodation,” says Graham.
Some organisations also offer cars to staff. This isn’t essential due to a plentiful supply of taxis. “When staff arrive, [Turner & Townsend] provides them with a car for the first month so that they can settle in and get their bearings. After the first month, they get a monthly cash allowance to rent or buy their own car,” says Carey.
When relocating British staff to Dubai, another challenge is making sure salaries are equitable with those of other colleagues based overseas, a decent wage in the UK may translate into a small fortune in India, so organisations can be faced with a balancing act when it comes to rewarding staff.
Turner & Townsend makes no distinction on the grounds of nationality in terms of base salary and perks.”All staff in Dubai receive the same benefits as others on their salary band regardless of their nationality. So, a project manager from India still receives the same benefits – flights, medical care, accommodation and transport allowance – as a project manager from the UK,” says Carey.
But it provides UK staff with an extra allowance. “Instead of a higher base salary, staff get an extra overseas allowance to reflect the difference in cost of living back home. In this case, UK employees would receive higher overseas allowances than Indian employees, as UK nationals are likely to have greater costs in their home country,” Carey adds. And the pace of change in Dubai is such that employers have to keep on their toes to not only deal with the constant influx of new staff but also rising living costs.
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- As with anyone leaving British shores to work abroad, an employee moving to Dubai will need basic assistance including flights, the cost of shipping belongings and temporary accommodation.
- Staff will be grateful for an accommodation allowance, as rent is paid one year in advance.
- British staff will be working alongside people from other countries. It’s a good idea to offer an extra allowance that reflects the greater cost of living in the UK.