End of Service Benefits
Zurich International and Insight Discovery have recently facilitated a roundtable discussion with business leaders to discuss the increasing burden of managing EOSB and how the landscape is likely to change in the years ahead. With expatriate employees staying longer in the region and the rate of salary exceeding expectations, the legal obligation of providing gratuity to exiting employees is only going to get more challenging.
The Department of Economic Development have welcomed such discussion forums and believe that this greatly contributes to Dubai maintaining its position as a commercial and financial hub, serving countries in the region and beyond.
In addition to the simple financial cost of providing gratuity, the more prudent companies are now looking to provide additional benefits to their staff in order to attract and retain talent within their organization.
According to our Head of Corporate Services “Graeme Field”,
“Running a simple funded gratuity scheme, where the cost of gratuity (estimated at 8.5% of monthly payroll cost) is set aside into an earmarked fund, in trust for the employees’ ultimate benefit, is a sensible way of managing cash flow of the business. More SMEs are now looking to provide additional groups savings schemes, institutionally priced, and with the potential to match employees’ own contributions, with retention governance, to make their overall remuneration package more attractive to potential and existing employees.”
More businesses are now seeing where the future lies with consultation papers suggesting the likelihood of legislation to make funding compulsory and are taking the initiative now to set up their own schemes to cover future liability.
At Credence International Brokerage, we have a number of solutions tailor-made to each company, using market leading providers, to help businesses all over GCC to solve this problem.