x Abu Dhabi, UAE Thursday 20 July 2017

Study finds more Gulf labour pain

The coming year could be grim for the rank and file as the global financial crisis forces companies in the region to keep costs low and wages down.

Among the markets in the GCC, Dubai appears to have been the hardest hit in terms of recruitment but it remains the number one place to which prospective employees want to move.
Among the markets in the GCC, Dubai appears to have been the hardest hit in terms of recruitment but it remains the number one place to which prospective employees want to move.

The coming year could be grim for the rank and file as the global financial crisis forces companies in the region to keep costs low and wages down, according to a new study from GulfTalent.com. "While job losses appear to have slowed down, recruitment activity in the short term is likely to remain slow," the company says in a report entitled Recession and Employment in the Gulf. "Given the market conditions, salaries in the Gulf are expected to remain flat in the near term."

But the study found the market could see some recovery by early next year. Among the markets in the GCC, Dubai appears to have been the hardest hit in terms of recruitment but it remains the number one place to which prospective employees want to move. John McGaw, the chief executive of the Dubai office of Killik and Co, says this downturn has wiped out more jobs than any previous one. "When I look back, I cannot remember ever knowing a contemporary of mine who didn't have a job in Dubai, even in previous bear markets," Mr McGaw says.

"I know three people who recently were laid off, one of whom worked for a big international bank for 18 years." More lay-offs may be coming, particularly with companies undergoing mergers and consolidations, GulfTalent.com said. Recently, the property developer Nakheel cut staff by another 400 people as it undergoes a restructuring. Dubai World, which owns Nakheel, has hired AlixPartners, the turnaround specialists who have advised General Motors on its bankruptcy, to assist in the process.

It is unclear whether more job cuts will come with a merger of Emaar Properties with the three developers under Dubai Holding. Even for those who have been able to hold on to their jobs, the changing employment market is still having an impact. People are working longer hours, being forced to relocate to less desirable cities and having less access to training, the GulfTalent report found. And because of low inflation, rising unemployment worldwide and a relatively strong currency in the UAE, these same employees are seeing few pay rises and, in some cases, fewer allowances and benefits, the study said.

Dubai's slowdown is having an impact on countries that have traditionally supplied employees to the UAE, such as India, Egypt, Jordan and the Philippines. Many of the emirate's financial, property and construction companies have made deep cuts in their workforce. While some of these workers are moving around the region to places such as Abu Dhabi, Qatar and Saudi Arabia, the total amount of remittances back to employees' home countries has declined.

The economic turmoil has also led to a change in demand for jobs. Applicants with experience in investment, administration and marketing are less in demand, while people with infrastructure, auditing or high-level executive experience are increasingly sought after, the report found. Employers are looking for "candidates who are perceived to add value from day one", especially those with more experience.

The age group of 35 to 50 has seen a significant increase in searches by prospective employers, GulfTalent said in the report. Job recruitment agencies have said that companies have been looking for more "grey-haired" executives who can create strategies to survive in the changed economic environment. In some cases, companies are looking for interim managers to steer them through. "We're looking [to recruit] people to come to this part of the world who can actually add value to businesses and make things happen ? you're seeing veterans but also better-quality expatriates coming," says Anthony Simpson, the managing partner of the Middle East office of Ray and Berndtson, in a recent interview.

Mr Simpson says applicants with Arabic-language skills and existing relationships in the region were in high demand. "The difference between the past and today is that those people who have Arabic-language skills and local business relationships, which are sustainable through downturns, are the most sought-after people in this market and are most likely to shine in this environment," he says. bhope@thenational.ae