One of the major selling points of being an expat banker in the GCC was the generous benefit package offered in addition to salary and bonus. Now, however, these are being scaled back.

According to the latest Zurich Wealth Monitor, expats in the Middle East are feeling the pinch. Not only are they facing the possibility of unemployment – with 50% of those surveyed worried about their job – but benefits are also on the slide.

“Work pressures in terms of reduced benefits, higher expectations and tighter budgets are on the rise with 41% of those surveyed in the UAE and 32% in Bahrain experiencing these issues,” says Carlos Sabugueiro, CEO, MENA at Zurich.

The benefits on offer to expats range from the more traditional (such as pensions, housing allowance, school fees for employee’s children) to the more lavish like beach club membership, flight allowance, maids, car allowance and even payment of utility bills (surprisingly expensive in the GCC).

“Housing allowance made up a big chunk of people’s benefits, but it’s being repositioned,” says Peter Greaves, director of financial services at headhunter McArthur Murray. “Rentals are crashing down, and banks’ revenues aren’t what they were, so it makes sense to review this.”

House prices in Dubai have tumbled by over a third in the last 12 months, according to figures from estate agents Knight Frank. Meanwhile, rentals fell by 34% during the first three months of 2009, says property consultancy Asteco.

The astronomical levels of inflation in the UAE – 14% last year – are also set to drop below 6% in 2009, a report from the National Bank of Kuwait suggested.

“Previously, local banks and international firms in the Middle East have been generous with their housing allowance. Increasingly, however, they’re adopting the policy that inidviduals should be paid a good basic salary but this should cover their housing and other costs,” says Alex Cormack, director, head of Middle East at executive search firm Sheffield Haworth.

Greaves says the implications of these reduced benefits can often be devastating for families.

“If you look at something like schools allowance, most banks will cap this at a certain amount or for three children,” he says. “A lot of these schools are more expensive than private schools in the UK or US. I know of large families where the children and partner stay back home while the banker works in the GCC. There’s an increasing number of split families at the moment.”