Is the Middle East ready for a Flexible benefits revolution?

By The HR Observer 

In 2013, we asked some of our Compensation and Benefit Forum speakers about whether the Middle East is ready for the introduction of flexible benefits.

There seems to be a 50/50 split between heads of reward and C&B in MEA with some who believe it could work and many who think the region is not yet ready.

Here’s what they said:

Yes, it could work

No, region not yet ready
“There seems to be growing discussion and interest in flexible benefits for retention purpose, cost management, increase in diverse employee needs, wanting employees to appreciate and understand the value of the benefits offered by the company. We are still evaluating it.”

Elaine Ong, Schlumberger

“I do not think the Middle East is ready yet for Flex. There are few tax benefits under Flex – which tends to be a reason for introducing it – so don’t see what savings it would bring.”

David Rockey, Nokia India and MEA

“Flexible benefits have been around for over 20 years in the US. I think it is doable in this region if there are certain minimums and protections built within. There is an expectation of a safety net in this region and I believe that companies will need to provide it. We are considering it along with a number of other options.”

John Ohrnberger, Abu Dhabi Investment Authority

“I feel the region is not ready to introduce flexible C&B. The reward vendors do not have the capacity to model out a flexible C&B in the region let alone providing us with basic C&B tools. There is also a legal factor and I believe it will not be possible to introduce flexible benefits in the region due to legislative requirements.”

Muhammad Jamal, Halliburton

“It is doable, however there will need to be a greater emphasis by the insurers on developing the systems – IT and underwriting – to make this work. We have not yet introduced it, but are seriously looking at it.”

Paul Johnstone, GE MEA

“The main thrust seems to me to be the better and more cost effective management of allowances; it is unlikely that a menu type arrangement will take off given that most expats rely on their allowances to provide a degree of financial security.”

Tim Knight, Kuwait Finance House

“Our markets are maturing to a point that the introduction of flexible benefits does not seem to be far off. We are most likely waiting to see a few companies introduce this prior to adapting it as ‘common practice’.”

Shawn Cramer, Maersk Oil Qatar

“Flexible benefits are probably a few years away from being perceived meaningful by employees in the Middle East. The focus has been more on cash than on benefits. Some benefits have been designed to deliver cash in the hands of the employee and may over a period of time get cashed-out as compensation structures get simplified.”

Nisheeth Pathak, Noor Investment Group

What do you think? Could 2014 be the year we see more and more companies considering Flex in the Middle East?

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