First came the boom, with the manic, unsustainable growth, and then came the bust. As Dubai’s real estate market collapsed, so did its job market as companies closed ranks and cut their losses and employees.
Now, one year on, the emirate’s biggest recruitment agencies see the first nascent steps of a revival for Dubai’s once booming employment market.
Led by the drive for increased hiring in sectors like healthcare, IT and telecommunications, salary levels in Dubai are set for a single digit rise in 2011, recruitment agencies have said.
While levels are unlikely to reach the highs of 2007/2008, recruitment agencies agreed that salaries could be raised by as much as eight percent by the end of the year.
“Salary levels have been relatively steady and I think 2011 salaries may show minimal increases of four to eight percent. However, bonuses will certainly be conservative for the end of 2010, early 2011,” Jennifer Campori, managing director, Charterhouse Middle East, tells Arabian Business.
At the executive level, salaries face a more difficult rebound, having dropped between fifteen and 50 percent during the downturn, according to Michael Al Nassir, president and head of Pedersen and Partners — Middle East, Africa and India.
This has lead to a realignment of recruitment policies by companies, with the focus now on employees that have the skills to operate in a drastically different environment from two years ago.
“Companies seek leaders who have not only been successful in growth, but who also know how to plan for the more difficult times or markets. Today’s business leaders need to be pragmatic, quick, not afraid to make tough choices and courage to make changes in reaction to their market,” Al Nassir says.
“In general, we see that regional employers are preferring to source top-grade talent by tapping into this resource pool without having to resort to salary inflation or raises that do not necessarily reflect job responsibilities and market conditions,” Lama Ataya, chief marketing officer, Bayt.com, adds.
Sectors where this scenario will come into play are construction and real estate which were the most affected during the crisis. At present, there are still more candidates than roles available and some employees have seen a 24 percent drop in the size of their pay as demand slowed to a near standstill.
A total of 1,296 construction projects worth more than $418bn were being built in the UAE before the downturn. When the crisis hit, 842 projects, worth more than $350bn, were put on hold, while a further 111 were cancelled.
However, Cliff Single of BAC Middle East said that the sectors were showing positive signs of hiring recovery as confidence returned to the region in the wake of more government investment and the Qatar World Cup bid win.
“Construction and real estate were the sectors lagging behind in terms of recovery; however, the recent success of the Qatar World Cup bid could have a positive impact on these sectors due to the massive investment in infrastructure that is expected to follow,” he says.
The sectors that saw the fastest growth in 2010 were healthcare, IT and telecommunications as multinationals tried to increase their market share in the Gulf. The banks and financial sectors remained cautious of hiring, waiting to see how the markets played out before taking on new staff.
“Many financial institutions have, this year, cut further, or at best, not hired significantly and they will want to reverse the trend and building up their businesses. This is likely to affect investment banking, private equity and insurance,” Al Nassir says.
According to Ataya, the financial sector is set to receive a boost in the coming year, with employers consistently rating it as one of the top industries in terms of job availability.
“The industries that topped our Job Index Hot Industries List in 2010 were banking and finance,” she says. “Telecommunication and Construction seem to have managed to most attract and retain top talent in the region this year, as consistently confirmed by the region’s surveyed employers,” she adds.
“Demand for talent will be strong as multinationals seek to increase their market share in the Gulf region,” says Al Nassir of Pedersen and Partners. He also added that he expected to see new growth in the region’s education sector as well.
“Expectations for 2011 are looking good with 69 percent of employers (of 4,765) stating that they are aiming to hire in the year to come, 29 percent said that they were ‘definitely’ hiring and 40 percent stated that they were ‘probably’ hiring,” Ataya says.
“We expect to see a return to growth in 2011 across industry sectors and company sizes, including SMEs, but by no means limited to SMEs,” she adds.
Campori added that she believed that the UAE’s small and medium enterprises (SME) market would see a “definite growth going into 2011” as an emerging market like the UAE was very attractive to SMEs, since it allowed them to gain an international presence in a young market.
She said that while she expected banks to remain quiet through Q1 and Q2, she believed that wealth management and SMEs would be key areas that would be pushed to help the overall growth of the economy.
“I think 2011 will be about growth and development, especially with the SME market, which makes up a large level of the UAE’s business,” she says.
Ataya said that many of the larger local and regional conglomerates, as well as regional multinational arms seemed to have overshot the mark when it came to downsizing staff counts in recent years.
“While we saw a lot of hiring activity taking place in 2010 to re-optimise and re-strategise talent pools, we have begun to see a return to hiring for growth in the past few months,” she said.
Ataya added that with the European and American job markets still in a state of turbulence, the UAE was likely to see an increase in professionals investigating career prospects in the country.
Despite the emergence of India as dominant force on the global market, she said that the UAE still appealed to talent from the subcontinent due to the fact that “the region is not seen to be as inflationary as it was a few years ago.”
“Companies are still open to attracting expats, however, they are much more scrupulous now about the skills and experience of an executive brought in from abroad,” Al Nassir says, adding that there was still a lack of high level leadership talent at the senior executive level.
In spite of the numerous issues that still haunt the emirate, all the recruiters polled said that there was no denying that Dubai’s job market was on its way back up, with companies regaining their faith and investing in it.
As a result, job vacancies have leaped up during the third quarter of 2010, and firms such as Bayt and Randstand have seen huge increases in registrations, going into 2011 with an increase of 33 percent and 25 percent, respectively, over that of the previous year’s numbers.
“We are in a much more normal job market now compared to both the overheated market of 2007/early 2008 and the sharp contraction in late 2008/early 2009. It is unrealistic to expect a repeat of the job market of 2007 and early 2008 as that is simply unsustainable,” Single says.
Pedersen’s Al Nassir said that those firms that had stuck through the crisis were now being rewarded for their commitment, as Dubai rebounded from its slump.
“The firms that were able to adapt to the crisis by bringing down costs, retaining clients and maintaining a presence here are now benefitting from their commitment to the region,” he says. “Dubai is still considered the hub for the region; many multinationals and large regional groups are now investing in building up their headquarters,” he adds.
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