Employee financial well-being a top priority for UAE companies

Pension plans, life cover, financial literacy schemes and counselling are top strategies implemented for employees, Zurich survey finds

Nearly seven in 10 employees in the UAE believe employers are responsible for providing financial well-being initiatives, a survey by Zurich International shows. Getty

Ninety-four per cent of UAE employers currently offer or are keen to offer financial well-being initiatives to drive employee engagement and loyalty, help lower resignation rates and attract top talent, a survey by Swiss insurer Zurich International has found.

While 69 per cent of UAE employers feel fully accountable for their employees’ financial wellness, another 24 per cent feel partially responsible, according to the survey, which polled 400 employers in the Emirates in January.

About 62 per cent of employers said pension plans and life cover are the top initiatives to build wealth and offer protection to employees, while 47 per cent preferred providing resources to improve financial literacy, and 38 per cent chose counselling to address financial worries at work, the survey found.

“Employers need to adopt a proactive approach in supporting the financial well-being of their employees,” said Swarnaleka Shetty, head of corporate life and pension at Zurich in the Middle East.

“By integrating strategies such as providing access to financial advisers to guide employees, employers can help employees secure their financial future.”

The Covid-19 pandemic put employee financial issues in the spotlight and many companies are now trying to formulate plans to help workers to bridge their savings gap.

Retirement savings is the biggest financial challenge faced by employees in the GCC, followed by childcare and education expenses, and saving for other commitments such as housing, day-to-day costs and emergencies, according to a January survey by global advisory company Willis Towers Watson.

About 78 per cent of employers in the GCC are planning to develop financial well-being strategies for employees over the next two years to help them bridge their retirement savings gap, the WTW survey found.

Meanwhile, near 70 per cent of employees in the UAE believe that employers are responsible for providing economic well-being initiatives, according to the Zurich survey.

“Becoming an employer of choice is a key motivating factor for employers in implementing financial wellness initiatives, with 70 per cent of the employers surveyed stating this as their top motivator,” Ms Shetty said.

Companies that deliver financial wellness initiatives for their employees tend to attract and retain talent longer, build employee loyalty and reduce the cost of recruitment.

More than 75 per cent of employees in the UAE are considering changing jobs in the next 12 months, with those aged between 25 and 34 most likely to switch organisations, a November survey by Zurich found.

However, 91 per cent of employees polled for the latest Zurich survey said that financial wellness initiatives are a key factor to stay with their current employer.

To achieve this, companies must work towards implementing programmes such as pension and life insurance plans and provide educational resources that aid financial literacy to meet employee needs and address their financial concerns, according to Zurich International.

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One of the main barriers to investing in such initiatives is difficulty in allocating suitable resources, with 48 per cent of UAE employers stating that the cost of offering such employee benefits is too high and 39 per cent indicating a need for more internal resources, the survey showed.

National Bonds, the Sharia-compliant savings and investment company owned by the Investment Corporation of Dubai, unveiled a Golden Pension Scheme last year to help private-sector foreign employees with their financial planning.

The scheme will give employees working for registered companies a headstart in retirement planning through instruments offered by National Bonds.

Last year, Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, launched a savings retirement scheme for non-Emirati employees working in the emirate’s government and public sector.

The system is in addition to the existing gratuity scheme, which is a defined end-of-service benefit that all employed residents in the UAE are entitled to after completing at least one year of service.