By Kamal Al Samarrai
Salaries will likely be the biggest trend this year, as companies in the UAE look towards variable pay structures for their staff
It’s no secret that 2019 was a year of downsizing and consolidation for recruitment, with few new mid to senior level roles being created.
The financial industry was hit particularly hard early on in the year with the unfortunate collapse of The Abraaj Group, leading the majority of investment banks and private equity players to go straight into caution mode and slow down hiring.
While we’re not seeing much of a change in that industry in 2020, fintech, on the other hand, continues to grow with strong hiring in line with an increasing number of start-ups in the UAE expected to reach 1,845 by 2022.
The challenge, however, is that candidates with fintech experience are not easy to find in the UAE, and much of the hiring is done from abroad.
The bright spots to look forward to revolve mostly around companies and services that are involved directly or indirectly with Expo 2020, but while the first half will see a continuation of this trend, with companies having solid and stable senior management teams that have been building towards the event, they will witness a revolving door of sales staff, marketing executives, event coordinators, account managers and other support roles.
It is for that reason that companies must address their retention early in the year with the aim of retaining their staff.
A large number of those revolving candidates are a result of companies’ failure to make the candidates feel secure in their roles. Yet as Expo 2020 kicks off, we suspect the market around the event to stabilise until mid-2021.
Outside of Expo 2020, downsizing has largely been completed across all sectors, and recruitment will see continued consolidation for the remainder of the year with a very tight labour market.
Companies remain cost conscious and the market remains in shortage of talent, with talented employees being well retained by their employers and not readily available or open to career moves to prevent upsetting their current status quo.
Many candidates will also only be willing to speak to specialised recruiters with a good reputation in the UAE, as we saw a real reluctance from candidates to share their CVs in 2019 for fear of their profile spreading through the thin market.
Employers will generally avoid filling vacant roles and instead spread out responsibilities across existing employees to mitigate the cost and the risk of hiring new staff. They will also become increasingly selective with their employment, with interviews stretching out over a number of months and, on most occasions, over four interview rounds for roles which in pre-2016 would only need two rounds and be closed in weeks.
Employers have become, in general, slightly arrogant in terms of respecting candidates’ time in the recruitment process. On a number of occasions, we have seen interview processes going on for longer than six months for a single role.
But the biggest trend in 2020 is decreased salaries as employers drop wages in favour of pushing towards variable pay, i.e. performance bonuses or commission structures.
For junior to mid-level roles, this could be acceptable but not in favour of many senior employees who expect certain increments when moving from one company to another. Employers should be able to have different pay structures and scales throughout the company. These new variable pay schemes will also lead to companies looking to replace existing employees with lower salaried employees who will agree to the variable pay incentive scheme.
A bright spot is the growing start-up scene and number of companies getting funding and growing their teams. However they should be cautious about fixed salaries. My start-up i-Recruiter deals with a lot of UAE start-ups and their hiring process, helping them find the lowest cost of attracting and hiring candidates while mitigating the risk of making a bad hire. We hope that more and more start-ups will use the platform so that we can help them grow their employees through targeted candidates searches and recommendations.
And finally, possibly the most important takeaway for companies from 2019 is that they should bring back fluidity to the market.
If employers are going to post roles and start looking for candidates, then they must make sure that all company's management are on the same page as to what sort of candidate they are looking for and what their budget is expected to get.
It is the responsibility of every single employer to make the job market fluid and attractive. Recruitment processes should not take longer than four to six weeks maximum. If they do, then the company’s process needs to be drastically changed.
More importantly, offering candidates a lower salary than they are currently earning “because of market conditions” is unacceptable (unless the variable pay is achievable and clear) as it only drives the whole market lower.