53% of GCC companies freeze hiring

JOBS FREEZE: More than half of GCC companies surveyed said they had implemented a freeze on hiring amid the global slowdown.

A survey of GCC companies has revealed that 53 percent had already implemented a freeze on hiring with a further 17 percent planning to do so in the coming months.

The survey on the impact of the global economic slowdown was undertaken by Dubai-based international HR consulting company ORC and around 150 companies responded to the survey from across a wide range of industry sectors with operations throughout the Gulf region.

The survey comes as thousands of employees across the region have fallen victim to the economic slowdown, especially in the real estate and construction industries.

John Macdonald, MD of ORC Worldwide (Middle East) said it was interesting to note the extent of initiatives and corrective measures that companies were taking.

He added: "Obviously staff costs are one of the first things to be targeted in a downturn and, in particular, the 2009 budgets for salary reviews where we found that around 50 percent of respondents reported that their salary review budgets had been adjusted as a direct result of the downturn, many reporting quite significant reductions, typically down from an average of 12 percent to around 5-6 percent, or lower in Oman and Kuwait."

The survey showed that 40 percent of all respondents had already implemented or were in the process of implementing a pay freeze for some or all of their staff while 11 percent had gone a stage further and cut pay rates.

Others had switched the emphasis towards performance-based rewards, modifying bonus targets or targeting specific positions that have attracted pay premiums in the last few years that were no longer considered necessary, Macdonald added.

In terms of employee reductions, the survey showed that only 15 percent of respondents had already implemented lay-offs with a further 20 percent planning to do so in the coming months.

Observing that the UAE was reported as being the most affected country in the GCC, Macdonald added: "While many of the corrective measures are necessarily severe, it is encouraging to see that a large majority of companies are taking positive steps to improve the level of employee communication.

"We also asked companies to tell us their top HR priorities for 2009 and the leading issues were retention of key staff, improving employee performance and productivity, organisational downsizing and reducing the cost of salary and benefits."

ORC Worldwide is an international management-consulting firm headquartered in New York, with a Middle East base in Dubai.

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READERS' COMMENTS

Trailing the trading
Posted by Peter, Oman on Saturday 7 February 2009 at 12:41 UAE time


The writer Andy is true and makes sense of what is happening in the ME but no one is having a guts to openly declare "recession in ME".Your's is the only paper I searched in google which speaks with determination the will of the people.Great and keep it up.Poor Dow Jones calculated companies production o/p through the chimneys however I calculates the increase of trailers/trucks derailed off the main streets day after day.

Freezing Hiring
Posted by Camil El Khoury, Dubai on Saturday 7 February 2009 at 12:40 UAE time


I think that most of the companies in the GCC are not used to downturn situations, the worse action that they could take is to panic and start thinking only short term. Those companies should think of hiring key positions, especially in Business Development and Strategy to be able to cope with the tough times and be prepared for the growth when it comes. What companies are doing, is decreasing the expenditures and that drives the economy downwards even further. So we should stop thinking in AlARM mode and start looking at how we will get out of this mess before other regions

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