Unlike elsewhere, private schools and their attendant tuition are the normal course of affairs for UAE families. Companies are finding that to entice expats to work here, they need to subsidise this cost.
Why subsidising school fees is the smart part of the UAE expat package
Unlike elsewhere, private schools and their attendant tuition are the normal course of affairs for UAE families. Companies are finding that to entice expats to work here, they need to subsidise this cost. Erin McCafferty writes
With the cost of education at an all-time high, many private companies are providing school fees as part of their salary packages for expats.
Government organisations have long paid education costs for the majority of employees and sometimes stipulate no cap on the number of children.
But according to new research by the consultancy Aon Hewitt, many private companies are also paying the cost of education to those in mid or high level positions, in order to entice expats to work here.
"We expect that benefit to become even more prevalent across organisations going forward," says Robert Richter, compensation survey manager for Aon Hewitt Middle East. "School fees have become a very significant factor in choosing a job here."
He said that such packages used to be for executives only, "but we see more and more companies are providing some sort of assistance to all of their staff".
The UAE differs from Europe and North America in that the majority of people here send their children to private schools. Mr Richter says that last year, 207,118 students in Dubai - or, 88 per cent of total enrolment - attended private schools.
Some schools - primarily the British- and American-curriculum establishments - charge Dh40,000 to Dh60,000 a year for primary and secondary education.
One company which pays its top-level employees an education allowance is National Bonds Corp. Since it was founded in 2006, the investment company has paid the school fees for up to three children per employee at middle management level and up. The policy applies to expats and local employees.
Saif Ali Al Shehhi, the executive director of human resources and administrative affairs at National Bonds Corporation, which is owned by the Dubai government through the Investment Corporation of Dubai - says the policy allows the company to hire the best employees.
"It means we can attract and, what's more, retain talented staff," he says. "We believe it's a good policy because we like to look after our employees and reward them fairly. If the staff are happy, they're more likely to work well, so it benefits everyone.
"We're aware that the school fees in this country have been rising in recent years and realise it is necessary to pay for them," he adds.
Mr Richter says that the UAE's school fees have been rising since 2008.
"The increase in fees resulted from escalating property prices in the UAE between 2008 and 2009, as well an effort to encourage international teaching staff to come to Dubai, and the fact that staff housing costs were rising, along with inflation," he says.
But even when property prices began to drop in 2009, he says, schools fees did not drop. "Many of the schools implemented extra fees at this time to cover extra-curricular activities," Mr Richter explains.
"This growth is attributed to a ballooning number of expatriates living in the emirate and an increasing number of Emirati parents choosing private education for their children, because of the international curriculum on offer," he says.
It's no wonder therefore that an increasing number of private companies now offer the cost of school fees to their employees as part of the overall pay package. However, although it is changing, it is still more prevalent at the upper echelons of the corporate ladder.
"When it comes to executives and top management levels, almost 80 per cent of companies offer an education allowance," Mr Richter says. "And at the professional level, about half of the private companies here are doing this."
He adds that as school fees continue to rise, more companies are likely to offer some form of assistance to employees to cover the cost.
Jane Donovan, 50, from the UK, says school fees were a consideration when she and her husband Michael Donovan moved to Dubai three years ago. She is now the finance director for Helix Health Solutions, which the couple owns. The Donovans have two daughters, aged seven and 11, both of whom attend Gems Wellington International School.
"When we originally came to the UAE, my husband worked for a healthcare IT company as CEO. He was given a package that included all school fees and housing costs, and it was definitely a contributing factor to our move over here," she says. "We were paying for both girls to attend private school in the UK and we were surprised to learn that the school fees in the UAE were even higher."
Now that the Donovans run their own company, they pay all the school fees themselves, which Mrs Donovan says takes a toll on the couple's finances.
"We are 100 per cent responsible for school fees, which is quite a burden financially. Now we have one daughter moving into secondary education, the fees have increased by almost 30 per cent just for her," she says.
Paul Valasco, 40, from Johannesburg, is another who benefits from an education allowance provided by his company. He has two children aged five and seven and as the communications Manager at Dubai Autodrome, he receives an education allowance of Dh1,500 per month per child.
"We have two children at school so this is greatly appreciated," he says, adding that companies in South Africa do not usually cover those costs.
"School fees are not part of salary packages back home so it would come out of my salary and I'm sure the percentage fee, relative to my salary, would be as high or higher than we pay in Dubai," he says.
"In the end of the day, my family are in Dubai because we seek the best place for our two kids to grow up.
"Dubai is by far one of the best places to do this while enjoying a good quality of life."