Connect with us

Business

Organizations in the GCC Revamping Benefit Offerings to Remain Competitive, Aon Study Finds

Published

on

Organizations in the GCC Revamping Benefit Offerings to Remain Competitive, Aon Study Finds

Employers are optimizing costs by shifting from cash allowances to a focus on benefits for employees

According to the latest Gulf Cooperation Council (GCC) Allowances and Benefits Survey conducted by Aon, a leading global professional services firm providing a broad range of risk, retirement and health solutions, the GCC region has witnessed a concerted shift from a pure-pay model to an emphasis on ‘total rewards’.

Representing a notable increase in the prevalence of benefit offerings for employees, the results are seen as a positive indicator for the region in attracting and retaining the right talent.

Whilst in previous years organizations were spending more aggressively on their cash allowance packages, the results this year show an increase in the prevalence of benefits being offered to employees across the region. The enhanced end of service benefit (EOSB) has also become a more frequent offering amongst employers, with figures more than doubling from 17% in 2017 to 35% in 2018, according to Aon. The prevalence of other benefits have registered strong growth too with life assurance at +12%, accidental insurance at +20% and long-term disability at +20% compared to the last year.

According to Aon experts, this growing trend is reflective of organizations aiming to optimize their costs and their total reward offering, whilst customizing it to the needs of their workforce. Conducted by Aon between February 2018 and April 2018, the comprehensive study covers diverse business sectors across the GCC region and is based on an analysis of 100+ multinational companies and locally-owned conglomerates across different sectors. Other top-level findings from the study revealed that: 

  • Paternity leave is becoming increasingly common amongst the best employers in the region
  • Maternity cover is the most prevalent treatment covered under medical benefit to all employee groups in the GCC
  • Standard working hours for the region clock in at 48 hours, with a range spread of eight hours per week
  • Typically, the maximum number of working days for annual vacation is 25 days and most organizations allow deferral of annual leave from one year to the next
  • The most prevalent allowances offered to executives, management and professionals are housing allowance, transport and children’s education assistance
  • Employees at Executive and Management levels are much more likely to receive education assistance, with a prevalence average of 83.5% amongst this group, whilst for professionals and support staff levels, the percentage is notably lower
  • The least common benefit for executives and professionals is overtime (10% on average), compared to a prevalence average of 50% for support staff
  • Two thirds (65%) of organizations provide relocation allowance to employees at the executive, management and professional levels, compared to just over one third (34%) for support staff
Chris Page

Chris Page

Christopher Page, CEO, Talent, Rewards & Performance, Aon Middle East and Africa, said: “The results of this study are particularly interesting, as they demonstrate how organizations are looking at and leveraging allowance and benefits structures to secure and retain the right talent with the right skillsets to help drive their business objectives. This is extremely important for the region, which is focused on promoting and nurturing local talent to support the growth vision of the GCC nations. The study also points at the shifting trends in the allocation of allowances and benefits, which will serve as a referral point for industry best practices.”

Arun Taneja

Arun Taneja

Arun Taneja, Rewards Consultant, Aon Middle East & Africa, said: “The shift from just pay to total rewards is a welcome step by organizations in the region, which also meets the aspirations we are seeing amongst young talent who are seeking challenging yet rewarding career opportunities. Moreover, a total reward offering helps organizations achieve efficiencies in terms of the Human capital cost base. The GCC Allowances & Benefits Survey highlights how different modes of allowances and benefits are changing, and how they are differentiated based on the employee groups– a trend which we very much expect to see increasing over the coming years.”

For further information or to purchase the full report, please contact Aon’s regional office on +971 43896300 or email [email protected]

Business

Euro zone business activity shrank in January as lockdowns hit services

Published

on

Euro zone business activity shrank in January as lockdowns hit services 1

By Jonathan Cable

LONDON (Reuters) – Economic activity in the euro zone shrank markedly in January as lockdown restrictions to contain the coronavirus pandemic hit the bloc’s dominant service industry hard, a survey showed.

With hospitality and entertainment venues forced to remain closed across much of the continent the survey highlighted a sharp contraction in the services industry but also showed manufacturing remained strong as factories largely remained open.

IHS Markit’s flash composite PMI, seen as a good guide to economic health, fell further below the 50 mark separating growth from contraction to 47.5 in January from December’s 49.1. A Reuters poll had predicted a fall to 47.6.

“A double-dip recession for the euro zone economy is looking increasingly inevitable as tighter COVID-19 restrictions took a further toll on businesses in January,” said Chris Williamson, chief business economist at IHS Markit.

“Some encouragement comes from the downturn being less severe than in the spring of last year, reflecting the ongoing relative resilience of manufacturing, rising demand for exported goods and the lockdown measures having been less stringent on average than last year.”

The bloc’s economy was expected to grow 0.6% this quarter, a Reuters poll showed earlier this week, and will return to its pre-COVID-19 level within two years on hopes the rollout of vaccines will allow a return to some form of normality. [ECILT/EU]

A PMI covering the bloc’s dominant service industry dropped to 45.0 from 46.4, exceeding expectations in a Reuters poll that had predicted a steeper fall to 44.5 and still a long way from historic lows at the start of the pandemic.

With activity still in decline and restrictions likely to be in place for some time yet, services firms were forced to chop their charges. The output price index fell to 46.9 from 48.4, its lowest reading since June.

That will be disappointing for policymakers at the European Central Bank – who on Thursday left policy unchanged – as uncomfortably low inflation has been a thorn in the ECB’s side for years.

Factory activity remained strong and the manufacturing PMI held well above breakeven at 54.7, albeit weaker than December’s 55.2. The Reuters poll had predicted a drop to 54.5.

An index measuring output which feeds into the composite PMI fell to 54.5 from 56.3.

But despite strong demand factories again cut headcount, as they have every month since May 2019. The employment index fell to 48.9 from 49.2.

As immunisation programmes are being ramped up after a slow start in Europe optimism about the coming year remained strong. The composite future output index dipped to 63.6 from December’s near three-year high of 64.5.

“The roll out of vaccines has meanwhile helped sustain a strong degree of confidence about prospects for the year ahead, though the recent rise in virus case numbers has caused some pull-back in optimism,” Williamson said.

(Reporting by Jonathan Cable; Editing by Toby Chopra)

Continue Reading

Business

Volkswagen’s profit halves, but deliveries recovering

Published

on

Volkswagen's profit halves, but deliveries recovering 2

BERLIN (Reuters) – Volkswagen reported a nearly 50% drop in its 2020 adjusted operating profit on Friday but said car deliveries had recovered strongly in the fourth quarter, lifting its shares.

The world’s largest carmaker said full-year operating profit, excluding costs related to its diesel emissions scandal, came in at 10 billion euros ($12.2 billion), compared with 19.3 billion in 2019.

Net cash flow at its automotive division was around 6 billion euros and car deliveries picked up towards the end of the year, the German group said in a statement.

“The deliveries to customers of the Volkswagen Group continued to recover strongly in the fourth quarter and even exceeded the deliveries of the third quarter 2020,” it said.

Volkswagen’s shares, which had been down as much as 2%, turned positive and were up 1.5% at 164.32 euros by 1158 GMT.

Sales at the automaker rose 1.7% in December, at a time when new car registrations in Europe dropped nearly 4%, data from the European Automobile Manufacturers’ Association showed.

Like its rivals, Volkswagen is facing several challenges due to the coronavirus pandemic as well as a global shortage of chips needed for production.

It also sees tough competition in developing electrified and self-driving cars. The merger of Fiat Chrysler and Peugeot-owner PSA to create the world’s fourth-biggest automaker Stellantis adds to the pressure.

Volkswagen said on Thursday it missed EU targets on carbon dioxide (CO2) emissions from its passenger car fleet last year and faces a fine of more than 100 million euros.

The group is expected to release detailed 2020 figures on March 16.

($1 = 0.8215 euros)

(Reporting by Kirsti Knolle; Editing by Maria Sheahan and Mark Potter)

Continue Reading

Business

Global chip shortage hits China’s bitcoin mining sector

Published

on

Global chip shortage hits China's bitcoin mining sector 3

By Samuel Shen and Alun John

SHANGHAI/HONG KONG (Reuters) – A global chip shortage is choking the production of machines used to “mine” bitcoin, a sector dominated by China, sending prices of the computer equipment soaring as a surge in the cryptocurrency drives demand.

The scramble is pricing out smaller miners and accelerating an industry consolidation that could see deep-pocketed players, many outside China, profit from the bitcoin bull run.

Bitcoin mining is closely watched by traders and users of the world’s largest cryptocurrency, as the amount of bitcoin they make and sell into the market affects its supply and price.

Trading around $32,000 on Friday, bitcoin is down 20% from the record highs it struck two weeks ago but still up some 700% from its March low of $3,850.

“There are not enough chips to support the production of mining rigs,” said Alex Ao, vice president of Innosilicon, a chip designer and major provider of mining equipment.

Bitcoin miners use increasingly powerful, specially-designed computer equipment, or rigs, to verify bitcoin transactions in a process which produces newly minted bitcoins.

Taiwan Semiconductor Manufacturing Co and Samsung Electronics Co, the main producers of specially designed chips used in mining rigs, would also prioritise supplies to sectors such as consumer electronics, whose chip demand is seen as more stable, Ao said.

The global chip shortage is disrupting production across a global array of products, including automobiles, laptops and mobile phones. [L1N2JP2MY]

Mining’s profitability depends on bitcoin’s price, the cost of the electricity used to power the rig, the rig’s efficiency, and how much computing power is needed to mine a bitcoin.

Demand for rigs has boomed as bitcoin prices soared, said Gordon Chen, co-founder of cryptocurrency asset manager and miner GMR.

“When gold prices jump, you need more shovels. When milk prices rise, you want more cows.”

CONSOLIDATION

Lei Tong, managing director of financial services at Babel Finance, which lends to miners, said that “almost all major miners are scouring the market for rigs, and they are willing to pay high prices for second-hand machines.”

“Purchase volumes from North America have been huge, squeezing supply in China,” he said, adding that many miners are placing orders for products that can only be delivered in August and September.

Most of the products of Bitmain, one of the biggest rig makers in China, are sold out, according the company’s website.

A sales manager at Jiangsu Haifanxin Technology, a rig merchant, said prices on the second-hand market have jumped 50% to 60% over the past year, while prices of new equipment more than doubled. High-end, second-hand mining machines were quoted around $5,000.

“It’s natural if you look at how much bitcoin has risen,” said the manager, who identified himself on by his surname Li.

The cryptocurrency surge is affecting who is able to mine.

The increasing cost of investment is eliminating smaller players, said Raymond Yuan, founder of Atlas Mining, which owns one of China’s biggest mining business.

“Institutional investors benefit from both large scale and proficiency in management whereas retail investors who couldn’t keep up will be weeded out,” said Yuan, whose company has invested over $500 million in cryptocurrency mining and plans to keep investing heavily.

Many of the larger players growing their mining operations are based outside of China, often in North America and the Middle East, said Wayne Zhao, chief operating officer of crypto research company TokenInsight.

“China used to have low electricity costs as one core advantage, but as the bitcoin price rises now, that has gone,” he said.

Zhao said that while previously bitcoin mining in China used to account for as much as 80% of the world’s total, it now accounted for around 50%.

(Reporting by Samuel Shen and Alun John; Editing by Vidya Ranganathan and William Mallard)

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate

Latest Articles

The Beaconsoft story and introducing its one-of-a-kind digital campaign intelligence platform 4 The Beaconsoft story and introducing its one-of-a-kind digital campaign intelligence platform 5
Interviews1 day ago

The Beaconsoft story and introducing its one-of-a-kind digital campaign intelligence platform

By Nigel Bridges, founding CEO of Beaconsoft Limited What were you doing prior to setting up Beaconsoft? Before setting up...

Top 8 Tax Scams to Watch Out For 6 Top 8 Tax Scams to Watch Out For 7
Finance2 days ago

Top 8 Tax Scams to Watch Out For

It is tax time and that means finding the best way to file your taxes and to get a refund...

Hisham Itani and Resource Group Recognized in the 2020 Global Banking & Finance Awards® 8 Hisham Itani and Resource Group Recognized in the 2020 Global Banking & Finance Awards® 9
Technology2 days ago

Hisham Itani and Resource Group Recognized in the 2020 Global Banking & Finance Awards®

Global Banking & Finance Review has awarded Hisham Itani the Chairman and CEO of Resource Group, Technology CEO of the...

Euro zone business activity shrank in January as lockdowns hit services 10 Euro zone business activity shrank in January as lockdowns hit services 11
Business2 days ago

Euro zone business activity shrank in January as lockdowns hit services

By Jonathan Cable LONDON (Reuters) – Economic activity in the euro zone shrank markedly in January as lockdown restrictions to...

Volkswagen's profit halves, but deliveries recovering 12 Volkswagen's profit halves, but deliveries recovering 13
Business2 days ago

Volkswagen’s profit halves, but deliveries recovering

BERLIN (Reuters) – Volkswagen reported a nearly 50% drop in its 2020 adjusted operating profit on Friday but said car...

Global chip shortage hits China's bitcoin mining sector 14 Global chip shortage hits China's bitcoin mining sector 15
Business2 days ago

Global chip shortage hits China’s bitcoin mining sector

By Samuel Shen and Alun John SHANGHAI/HONG KONG (Reuters) – A global chip shortage is choking the production of machines...

Iran's oil exports rise 'significantly' despite sanctions, minister says 16 Iran's oil exports rise 'significantly' despite sanctions, minister says 17
Business2 days ago

Iran’s oil exports rise ‘significantly’ despite sanctions, minister says

DUBAI/LONDON (Reuters) – Iran’s oil exports have climbed in recent months and its sales of petroleum products to foreign buyers...

Nissan to source more UK batteries as part of Brexit deal 'opportunity' 18 Nissan to source more UK batteries as part of Brexit deal 'opportunity' 19
Business2 days ago

Nissan to source more UK batteries as part of Brexit deal ‘opportunity’

By Costas Pitas LONDON (Reuters) – Nissan will source more batteries from Britain to avoid tariffs on electric cars after...

Muted recovery for UK retailers in December ends worst year on record 20 Muted recovery for UK retailers in December ends worst year on record 21
Business2 days ago

Muted recovery for UK retailers in December ends worst year on record

By David Milliken and Andy Bruce LONDON (Reuters) – British retailers struggled to recover in December from a partial coronavirus...

Chinese phone maker Honor partners with key chip suppliers after Huawei split 22 Chinese phone maker Honor partners with key chip suppliers after Huawei split 23
Business2 days ago

Chinese phone maker Honor partners with key chip suppliers after Huawei split

By David Kirton SHENZHEN, China (Reuters) – Chinese budget phone maker Honor said on Friday it had signed partnerships with...

Newsletters with Secrets & Analysis. Subscribe Now