Why more Europeans coming to UAE for jobs could lower salaries

As the euro zone unemployment rate hits all-time high, the number of candidates looking to come to the UAE and the region has gone up.

This may be good news for employers who are looking for a bigger pool of talent, but will it depress salaries of people who are already working in the country?

“There has certainly been a very significant increase in the number of applications we are getting from Europe, and this has been the case for some time.

“It does increase candidate supply and competition for places, but I don’t see it having a very significant impact on salary levels in the UAE as most employers have become used to the luxury of hiring from an available talent pool in the local market, and now bring from overseas far less frequently than in 2006-2007,” Toby Simpson, Managing Director, The Gulf Recruitment Group told Emirates 24|7.

Industry players believe employers will be spoilt further with choice as human talent becomes readily available.

“We can expect to see more people coming from the region. How can the salaries go up if there are more people in the job market?

“I don’t know if this will translate into a cut in salaries but it will be difficult to see an upward trend,” said the HR manager of a multi-national bank on the condition of anonymity.

Analysts also believe that other GCC countries like Saudi Arabia and Qatar may see more people coming from the euro zone as compared to UAE.

“In general, I would say that the opportunities in Saudi Arabia and Qatar are increasing the number of European recruits there while in the UAE, Abu Dhabi looks promising in terms of recruitment opportunities.

“Many westerners are losing opportunities due to the process of Emiratisation and there is not a demand in other sectors that would balance that out.

“Therefore, overall salaries should not be affected particularly as the UAE economy is strengthening,” said John Nolan, recruitment consultant for Huxley Associates.

“We’ve seen an inflow of candidates from the euro zone, although this hasn’t largely impacted salaries in Dubai.

“While general unemployment rates may be climbing, many European executives indicate that it is challenging to find skilled professionals.

“For instance, a Robert Half survey of more than 1,300 European chief financial officers found that nearly two-thirds (63%) said it was challenging to find skilled financial professionals today.

“As a result, there continues to be demand for top talent, which is keeping remuneration levels steady, or even increasing in some areas.

“In the UK some base salaries have increased over the general public sentiment that executive bonuses were too high.

“Many British expatriates are therefore requesting higher base salaries in the UAE, but need to sometimes consider the overall remuneration package.

“With the added benefit of a favourable taxation climate, they most often will still see an overall increase to total base compensation when all factors are considered.

“In addition, we must remember that the UAE is figuring prominently within a global economy and workforce. While there may be challenges in the euro zone, the emerging economies of Asia and South America are also attractive locations for top talent.

“In order for the UAE to remain competitive, companies need to benchmark salaries against a global landscape in order to recruit and retain the top international talent,” said  said James Sayer, Associate Director to - James Sayer, Director, Robert Half UAE.

The rate of people seeking work in the Eurozone hit 10.8 per cent in February of this year, the highest since the euro currency appeared in 1999 and the problem is most stark among young people.

According to the Eurostat agency, jobless rate rose for the 10th consecutive month, hitting 10.8 per cent to set a 15-year record for the 17 nations sharing the single currency and if predictions are to go by unemployment could top 11 per cent in 2012.

Estimates show that more than 17.1 million men and women were out of work in February, 162,000 more than a month earlier and 1.48 million more than a year ago.

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