People Magazine

Child education allowance: perk or part of the package?

Children education allowance
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The UAE has a unique structure of employment policy, and allowances are a big part of that.

The cost of schooling in the UAE is one of the highest in the world.

Child education allowance amounts offered can make a huge difference to potential and current employees.

Flexibility and generosity in child education allowance limits could drastically affect the quality of talent you can secure and retain in your organization.

The UAE has always been committed to fostering and welcoming talent to strive for more and achieve higher results. It believes that by working together and inclusively with as many different people as possible will lead to more significant innovation.

That is just one of the reasons why Dubai has such a high level of international workers. Around 90% of the population of the UAE are expats, resulting in a unique approach to how visas and remuneration works.

When you have a consistent policy that is geared towards finding the best, it means that those you might hire come with a diverse range of circumstances. They might come from thousands of miles away, they might come with several degrees, and they might come with a few children. For many of the workers lured to Dubai, any relocation involves their whole family, including their spouse and offspring and so any role consideration, has to take into account how the support and schooling for their kids would take shape.

UAE children education Allowance

In the UAE private sector employment contracts will usually include a remuneration package as opposed to a single salary amount. As well as their legally mandated residential visa and health insurance, this package will come in the following breakdown:

  • Their basic salary
  • Their housing allowance
  • Their transport allowance

In some cases it may also include:

  • Children education allowance
  • Flight home allowance
  • Additional health insurance (i.e., Dental)
  • Family sponsorship allowance

Children education allowance rules are not mandated by the government in the private sector and as such are very much dependant on the organization’s preference, budget and market fluctuations.

Following the financial pinch of 2008, it was a benefit that many companies choose to relinquish in order to cut costs. Even in the case of child education allowance reimbursement rules, there are no set obligations that an employee must adhere to.

Why the children education allowance amount matters

In the simplest terms, this specific allowance or benefit is crucial to many job seekers because of the cost of education in the UAE. While salaries were expected to grow at around 4.8% in 2018, far stronger growth than that of Western Europe, the growing cost of living in the UAE, particularly with schooling can still be prohibitive for those considering relocation.

School fees within the UAE have consistently risen year on year in the last decade, much to the dismay of parents in the country. The lamenting over the cost of education has been a major stumbling block over attracting and, more importantly, retaining talent in the UAE and the wider Gulf region.

In Dubai alone there are 195 private schools with over 250,000 students and annual fees can climb to as high as AED130,000 for one child. To combat this, the Dubai Executive Council ruled in June 2018 that there would be a freeze on fee increases for the 2018/2019 educational year.

With the rise in the number of schools across the UAE, projected to be 1,406 by 2020, increasing the level of competition, there does seem to be some relief for parents as many key schools are even reducing their fees by up to 15%. That said, a recent survey still concluded that the cost of sending a child to school in the UAE, from primary to university is Dh365,025, the second highest in the world behind Hong Kong.

That same survey concluded that 82% of parents would make personal sacrifices for the child to succeed, which would include their choice of job and its location. If they can secure a position in a place that provides a high level of education within their budget, that will significantly impact their decision-making process. This means that those employees who are parents and might be considering a job offer or even whether to stay in their current role will look closely at an organization’s child education allowance rules and policies before making a decision.

Child education allowance rules in your organization

If you are concerned about your child education allowance limits and policies, there are a few things you can do. Recognizing the importance of this benefit to potential and existing talent is the first step. Your HR team needs to consider their outlook on child education allowance amounts when designing their employee retention strategies.

There are different options available to you, depending on the size and structure of your organization; you might decide to :

  • Employ a cash payment system or a reimbursement process.
  • Offer lump sum amounts or staggered payments that suit your financial structure more.
  • Institute a cap on the number of children or the total amount provided.

Negotiation is one thing, but failing to offer the option at all, could be costly in the long run for your organization.

If your organization isn’t in a position to offer child education allowances, there are some other ways to incentivize your employees. You could provide flexible working hours, especially if it helps with childcare costs.

Expand the skills of your employees with professional development and training programmes, which could result in a raise. Consider options that help them find a better work/life balance that suits their family.

The simple fact is that schooling within the UAE can still be extremely expensive and so roles that offer a children education allowance amount will always be more appealing to a talent that has a family. If an organization wants to employ the best, they should offer the best.

By providing support that will improve the work/life balance of your employee and prevent financial stress, you are more likely to have a more productive and engaged employee. Companies within the UAE who wish to succeed should certainly consider adopting positive children education allowance rules.C

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