Employees becoming hot property as firms expand

Now is a good time to be an employee, and a difficult time to be an employer, as companies across the region look to ramp up their workforce in a tightening labour market, according to the Arabian Business Business Confidence Survey.

The survey asked respondents whether their companies would be taking on more employees, cutting back their workforce, or keeping staff levels stable over the next six months.

Over half of respondents (52.47 percent) said their companies would be looking to attract more talent to their organisation in the period.

A little more than a third of respondents (35 percent) said their work force would remain unchanged, and only 12.6 percent of respondents indicated their company would look to shed staff.

The survey's findings come as companies across the GCC are benefiting from loose credit conditions with interest rates set by an expansionary US Federal Reserve policy, and a surge of public spending as governments look to convert a petrodollar windfall into a lasting infrastructure.

The findings also come as the region's economies show signs of over heating with record levels of M3 - the broadest definition of money - circulating in the system, and double digit inflation.

The survey has highlighted the recruitment of skilled labour as the biggest impediment to growth for regional companies.

Almost one out of every five respondents (19.7 percent) said that a lack of access to skilled labour was hampering their ability to expand. Almost as big an impediment to growth according the survey (with 14.5 percent of respondents) has been the cost of acquiring that labour.

Recruiting companies in the region not only face a tight labour market with too many jobs for the number of candidates, but have also so far been unable to break the link between inflation and salary expectations.

That has made for a volatile labour force permanently looking for the next company to jump to if their salary expectations are not met by their existing employer.

In the GCC, Saudi companies are the most active recruiters, with 64 percent of respondents saying their company would increase staff levels over the next six months, and just 8.2 percent looking to rationalise their workforce.

The remaining six countries of the GCC posted fairly uniform with results all around the regional average.

The smallest companies in the region were the most likely to look to decrease their workforce. Over half (54 percent) of firms with less than 50 employees said they would either keep recruitment levels the same, or decrease staff numbers. That number fell to 39 percent for companies with over 1,000 employees.

The Arabian Business Business Confidence Survey was completed by over 500 respondents from across the GCC. The survey has found business confidence is falling across the GCC with Bahrain and the UAE the most pessimistic in the six-nation group.

Bahrain and the UAE registered the highest levels of concern over the shortage of skilled labour and rising costs of labour and materials. The two countries were also the most pessimistic overall.

They were the only two countries with a greater percentage of business people predicting deteriorating economic conditions over improving conditions in the next six months.

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