Oil industry could face hiring freeze in the region as UAE recruitment falls
The continuing slump in oil prices that has plagued the industry for the past year could lead to a hiring freeze in the sector, says an expert.
Advertising of jobs in the region’s oil and gas sector fell by 19 per cent last month from a year earlier, with the decline for the UAE much steeper at 19 per cent, according to the recruitment website Monster.com’s employment index.
The recruitment consultancy Oxford Strategic Consulting (OSC) said that despite the reduction in advertised vacancies, firms operating in the region need to maintain local talent.
“For those GCC companies that decide to stop the talent flow by freezing recruitment, as many inevitably will, it would be wise for them to focus on retaining national talent,” said Robert Mogielnicki, the head of public relations and senior analyst for OSC. He said that if the talent flow of GCC nationals into the sector slows to a trickle, it will be crucial for companies to retain existing national employees to prevent a move to a competitor during the next “war for talent” – or jumping into another industry altogether.
The decline in hiring is probably a result of cost-saving strategies introduced by many companies as a response to oil prices. Several major players, such as BP and Total, have cut costs, and this has had knock-on effects in the oil services sector with Halliburton and Weatherford.
“Many companies we work with have imposed cost-cutting and recruitment freezes,” said William Scott-Jackson, the OSC chairman.
He said the usual pattern is the oil price drops force companies to cut costs to maintain profit and shareholder value.
Then, as a result, a recruitment freeze occurs – especially of “longer-term talent like graduates”. He added: “A few years later, there is a massive shortfall of talent and the [recruitment] war starts up again.”
Mr Scott-Jackson added that the skills shortage will only cost companies more in the long run as a result of an increase in labour costs. This means that when there is volatility in the market, labour costs can only be reduced by cutting the numbers again. “It is a vicious circle,” he said. “Our advice – stopping the talent flow should be the last resort. The best time to recruit great talent is when everyone else is cutting.”
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Updated: June 16, 2015 04:00 AM