Mercer, a global pioneer in reinventing the world of work, reshaping retirement and investment performance, and unlocking real health and well-being, is a business of Marsh.
The 2025 Middle East Housing and Schooling Report, published by McLennan (NYSE: MMC), today states that the changes in the allowance and benefit strategies are aimed at attracting and retaining the top talent in the region.
The reports are based on insights from organizations throughout the Middle East and the UAE.
Competition over attraction and retention of critical talent or of talent with specialized skills keeps on increasing, and rising numbers of employers are reconsidering their housing allowances and schooling benefits to ensure they remain competitive, as these are regarded as core components of the employee value proposition and highly valued by employees.
According to the report, lots of companies in the UAE continue to offer allowances or benefits, and design decisions, both in policy form and payment arrangements, are capable of having a material impact on the employee experience.
Key findings for the UAE
Housing allowances are widespread: 70 percent of UAE employers offer a separate housing allowance, 25 percent include housing within a broader allowance, and the remainder provide cash packages. This shows housing remains a vital benefit.
Upfront housing support is common: 52 percent pay the housing allowance upfront, which helps with advance rent cheques. 48 percent have no policy for advance housing payments.
Most organizations do not review housing allowances regularly: Only 20 percent review policies yearly, while 59 percent review only as needed. Housing allowances increased an average of 4 percent from 2024 to 2025.
Schooling coverage is common; policies often differ by level: 89 percent of UAE employee respondents offer schooling coverage. 36 percent of them implement identical policies to all eligible employees, and 64 percent differentiate based on seniority or other factors (GCC, without KSA).
Few have changed schooling policies this year: 19 percent reported a change in 2025; competitiveness (72%), and increasing costs (44%), are the chief triggers to change (GCC without KSA).
Mercer’s UAE Career Products Leader of Mercer Middle East, Andrew El Zein, said, “Top talent is at a premium in the UAE. Allowances and benefits now influence outcomes at every stage of hiring and retention. When housing and schooling policies are market-aligned, clear, and communicated well, they provide organizations with an advantage in their talent attraction and retention strategies. This is about building a sharper employee value proposition that enables organizations to acquire the right talent for their growth ambitions at a time when attracting top talent is a business imperative.”
Implications and opportunities for talent strategy
Housing and schooling need to be discussed as one of the core employee value proposals (EVP), and it is particularly important in the case of the fierce competition for top talent.
Having regular review cycles, which are facilitated by market checks, is what guarantees that policy does not fall behind any significant shifts in the costs of rent or tuition.
In case of feasibility, advanced housing is a significant cash-flow enhancement to the employees, and it can mitigate the need to continuously take on personal loans annually to cover the school rent, as well as clear and sensible schooling policies that can strike a balance between cost-control and equitable access, which can drive an organization up the pyramid of competitiveness in the talent race.
“Regular benchmarking and reviews, along with practical measures like advanced housing payments, can provide organizations with the competitive edge in their talent attraction & retention efforts. As talent competition continues across the region, employers must ensure they have a strong employee value proposition, which includes market-competitive allowances and benefits to remain competitive,” said Aleksei Kolesnik, Career Products Manager of Mercer Middle East.
About the report
The Middle East Housing and Schooling Report by Mercer focuses on housing allowances and education benefits offered by employers.
The 2025 version addresses policy design, prevalence, and payment forms, and UAE organizations will be in the spotlight of the participants.
The statistics represent employers that have structured allowance and benefit policies across all fields in the market.
