UAE: More companies offering bonuses as 'key tool' to retain talent

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Several companies in the UAE are willing to shell out bonuses to attract and retain talent, according to recruitment experts in the country.

“Employers in the country and the region are increasingly using bonuses as a key tool to attract talent with some statistics suggesting up to a 35 per cent increase this year over 2022,” said Aparna Navin from Holcim Group.

The comments come a week after Emirates announced a whopping 20 weeks’ worth of bonus to its employees on the back on record-breaking results. Earlier in the year, another airline FlyDubai had also offered its workers a bonus of 22 weeks’ worth of pay.

Some say that bonuses are becoming more common. “Bonus structures of all kinds are becoming more commonplace and not just for the C-Suite roles,” said Tiago Costa, CEO of Parisima Talent. “Companies want to retain their best talent, and bonuses and long-term incentives – such as clear career development pathways into senior roles and family support such as education allowances – are at the forefront of recruitment related discussions about benefits.”

However, a recent poll by Khaleej Times indicated that an overwhelming majority of private sector employees in the UAE haven’t received a bonus in the recent past and don’t expect to this year.

In the Whatsapp poll, 6000 respondents said they haven’t received a bonus this year as opposed to 900 who did receive.

Discussing bonuses

According to some experts, the topic of bonus is brought up by potential employees as early as the second meeting during the recruitment process.

“We find that bonuses and how they are achieved are one of the most frequently mentioned benefits during the recruitment process,” said Tiago Costa, CEO of Parisima Talent.

“The discussions around bonuses will focus on two things primarily – how a bonus is calculated and how do people achieve it. They discuss how the split will be if it’s a team bonus, does duration at the company play any factor in the amount and then also, when will it be paid,” Costa added.

Another recruitment expert says that bonuses increase the attractiveness of certain job offers.

“Candidates frequently highlight the extra benefits, notably bonuses, they presently enjoy at their jobs and use these as a benchmark when considering new job opportunities,” said Sukhada Kulkarni from Elista Consultancy Services DMCC.

“These discussions often delve into the structure and frequency of bonus payouts, eligibility criteria, performance metrics linked to bonuses, and the possibility of discretionary or guaranteed bonuses. Some candidates are also interested in knowing how bonuses complement their overall compensation packages," Kulkarni said.

The trend in bonuses

Although bonuses were initially only offered to C-suite executives, that trend is now changing.

“Since 2021, there has been a notable expansion in their application to mid-level and junior-level positions,” said Navin.

Costa said offering bonuses to retain employees was a “no-brainer”. “A well-structured, well-honoured bonus programme can incentivise talent to stay,” he said. “It’s the carrot that wins every time.”

Kulkarni said she has also noticed a similar trend.

“We've observed that in today's competitive job market there is a notable increase in performance-based bonuses. It's becoming increasingly common for organizations to include bonuses as a component of their compensation packages, recognizing the value of rewarding employees for their contributions and incentivising them to stay," she said.

"This approach not only helps retain skilled individuals but also fosters a culture of performance and loyalty within the workforce.”

Kind of bonuses

The nature of bonuses also differ based on company and roles.

“So in terms of the bonuses within the recruitment industry itself – we see that recruitment companies deliver commissions on a monthly or quarterly sales achievement,” said Costa. “We still see a lot of roles with an end-of-year bonus based on company earnings, and companies with more intricate role requirements have a signing-bonus or a 6-month in role bonus.”

According to Navin, some companies are even rethinking their bonus structures.

“With companies wanting the gen-next for their business continuity, attracting the right talent requires organisations to think differently,” she said. “UAE companies have revamped their bonus structures to better align with the expectations of younger employees who value immediate and tangible rewards.”