Compensation and assignment practices in the United Arab Emirates (UAE)

Written by HR&Relo Advisors and Baker Tilly’s  Lynette Stolarzyk and Kim Wylam

The world of business is constantly changing, and globalization, if not already, is becoming a necessary component to a wide variety of industries. To become and remain competitive, companies must re-think their traditional talent development plans to incorporate international assignments.

Each country and city pose unique challenges relative to the work environment, local and expatriate staffing and total rewards package. However, in the United Arab Emirates (UAE), this challenge can get even more complicated since it is more attractive and common to hire expatriates “expats” than locals.

The UAE is home to around 250,000 British expatriates, the largest Western contingent. The population of US workers is estimated around 40,000 and mainly located in Dubai.

Why do so many organizations in the UAE prefer to hire expats?  Many reasons explain the living practices (some of which arise from employer and employee perceptions), while others relate to the policies and the realities of the labor markets both locally and abroad. This paper explores some of the drivers and complexities surrounding this phenomena and what companies may want to consider when structuring both local and expat compensation and benefits – particularly allowances to secure competitive hiring of both.

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