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While the Middle East has long claimed many of the world’s expat population due to their generous remuneration policies, if new research is to be believed then things may be set to change. According to global outsourcing company Aon Hewitt, Europe is leading the way in today’s bonus culture. For expats looking for the ultimate in financial remuneration it may soon pay to look at Europe as a possible destination.
The financial crisis of 2008 essentially put the brakes on the ‘bonus culture’ of Western nations; particularly in the financial services industry. As companies tightened their belts to survive and the public and share-holders made their distaste for exceptional bonuses felt, so bonuses began to shrink, or be withdrawn altogether.
However according to the newly published research, Europe may be the first to turn the corner from economic austerity. As a part of this process, bonuses are apparently on the rise and are set to finally match pre-crisis levels. While Europe as a whole is leading the world, the UK in particular tops the charts for the size and frequency of the bonuses on offer to senior managers and top earners.
However while the financial packages on offer may finally be in recovery, don’t assume that these bonuses are going to be handed out as readily as they were in the past. Almost 40% of respondents to the survey claimed that major changes had been made to the performance criteria required in order to achieve a bonus.
According to the study, almost 25% more of the companies surveyed gave out no bonuses in the last financial year in comparison to the year before – mainly as a result of poor financial performance.
In other words, shareholders are slowly coming around to the benefits of bonus schemes in order to encourage hard work and reward the most high performing individuals. Placing a strict set of criterion on a bonus ensures that only the most exceptional performers are duly rewarded, in line with the results they have produced for the company.
No longer are bonus plans considered ‘wasted money’ as they were often portrayed during the financial meltdown. Instead today’s bonus plans are more carefully aligned with business results. An astonishing 94% of those companies surveyed claim that their current bonus plan is strictly in line with business objectives and only seeks to reward activities that benefit the company in the long term.
The good times may not be back just yet, but high flying expats are already looking to Europe for their next move so as to maximize their chances of earning the rewards they deserve.
The question is really whether the Middle East will follow suit in the hope of retaining their top talent. Some authorities are already predicting a 5% rise in salaries in the Gulf States next year, but even this may not be enough to keep hold of their top expatriate workers.
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