Firms hold off on hiring amid global crisis

HOLDING BACK: Companies in the UAE are adopting a 'wait-and-see attitude' towards recruitment. (Getty Images)

Companies across the United Arab Emirates, especially in Dubai, are holding back on hiring as they ride out a global economic crisis that is putting the brakes on a regional property boom, recruitment executives said.

For years, the desert city of Dubai - home to the world's biggest mall, man-made islands in the shape of palm trees and another set in the shape of a world map - has attracted foreign talent with promises of tax-free salaries and access to freehold property ownership.

But as companies in the emirate rethink expansion projects in the wake of a global economic slowdown, some property firms are laying off staff while companies in other sectors are holding back on new hiring, recruitment executives said.

"We have seen a propensity among employers to delay recruitment," said Rabea Ataya, chief executive at Bayt.com, a regional recruitment website.

"Everyone is adopting a wait-and-see attitude. The economy here is so closely intertwined, when any part of the economy experiences a hiccup others want to wait and see how it will affect them."

Like elsewhere in the world's top oil-exporting region, Dubai's economy has been surging on six years of high oil prices and the government's move to allow foreigners to invest in property beginning in 2002.

Residential property prices in the emirate jumped more than 30 percent this year alone, according to analysts in a poll by newswire Reuters in August. But with analysts expecting a correction in house prices, companies are holding back on some property and tourism projects, recruiters said.

"In real estate, if you look at large clients of ours like Nakheel or Emaar, they're not hiring at all, they are reducing some of their staff," said Mike Hynes, managing partner at Dubai-based recruitment firm Kershaw Leonard.

Still, new jobs in construction, information technology and retail are "booming", Hynes said. "We are seeing the same number of jobs coming through the door," he said.

Recruiters said employers cannot afford to take risks as multinational firms freeze hiring globally and local companies stand by to watch how the fallout of the global financial turmoil will play out in the region.

"There is a decline in jobs. I think it's cautiousness at this stage," said Ahmad Waarie, general manager for Watson Wyatt in Dubai, a consultancy firm that provides human resources advice to about 750 Gulf companies.

"In the real estate sector, it is really obvious. There are layoffs. Dubai is typically the fastest to react so we are seeing more across Dubai - but it is also leading the way for the Gulf."

Private developer Damac Holding said last week it was cutting 200 jobs while Emaar Properties, the UAE's largest publicly traded developer, said it was also reviewing its jobs policy.

Meanwhile, Emirates NBD, the country's largest bank, meanwhile, has halted retail lending to foreigners employed by top Dubai property firms on fears a slowdown could jeopardise their jobs and income.

The slowdown is happening as all recruitment firms are bombarded with new job applications from bankers hoping to escape the West as the credit crisis forces big-named investment banks to slash jobs.

Bayt.com, where 2.5 million jobseekers have posted CVs, received about 150,000 to 160,000 new CVs in each of the last two months - double levels in earlier months, Ataya said. About 7,000 jobs are advertised on the website, he said.

Given the job market squeeze, firms with the appetite to hire can attract top executives with 25 percent lower compensation than they could six months ago, Waarie added.

"How often would you see CVs from global heads of banks like Goldman Sachs? Not very often - that sends a signal," he said. (Reuters)

Print | Email | Discuss this article

| Share |

MORE FROM ARABIANBUSINESS.COM