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29 March 2024

Job sector to see gradual upturn

Job sector to see gradual upturn. (AFP)

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By Shuchita Kapur

Employment dynamics in the UAE are on the cusp of a turnaround with a substantial proportion of firms giving serious consideration to resuming hiring in the short term, industry experts told Emirates Business.

"We are currently witnessing a gradual return of confidence to the market, with more and more firms either hiring or at least starting to think seriously about resuming hiring," said Siobhan O'Reilly, Recruitment Manager BAC Middle East.

Having been an employer's market since the beginning of this year, chances are that tables will turn and employees could be in a better position to negotiate once hiring resumes.

Better growth prospects and the large number of skilled employees that might have exited the country could act as catalysts for this reversal in the job market, say experts. "One unknown factor that will have an impact is precisely how many skilled professionals have departed the UAE market over the last year and how much spare capacity is left within the labour market.

"This will determine how long it will remain an employer's market once hiring resumes," she added.

James Sayer, Senior Manager at Robert Half, a specialised global recruitment firm in the UAE, too believes it is just a matter of time before companies start hiring again.

"We see the outlook as being positive. We have noticed a significant switch in employers' hiring trends since the beginning of the third quarter of 2009. Early indicators show employers will be looking to increase volumes of recruitment in the fourth quarter of 2009 or the first quarter of 2010, especially after Ramadan.

"Employers made retrenchments in the first half of the year to reduce their costs, now with the market picking up, they realise they may have cut too deeply and are looking to re-hire to cope with increased workloads. In summary, the UAE has a positive outlook going into Q4 2009 and Q1 2010," he said.

However, O'Reilly cautioned against assuming that it will be good old 2008 all over again. "We cannot expect a return to the environment of early 2008 where employers were entering sometimes into a frenzied bidding war to attract talent," she said.

Even though the prospects of employment seem to be brighter now, international trends can have a negative impact and dampen the positive outlook for the country.

"It is not easy to give a very clear picture about how the future hiring landscape will look like in the UAE. We are certainly seeing a positive turn in the employment market but international job markets are still uncertain and that can impact the UAE. It's difficult to say when the international markets will improve," said Panos Manolopoulos, Managing Partner Middle East at Stanton Chase.

Manolopoulos believed the last quarter of the year will be crucial to the job market. "We need to see if companies will commit to projects in the last quarter of this year that they'd put on hold. If that happens, it'll be a very positive sign for the job market in the country. The market has already taken a positive turn but hiring levels will not be at the same level as last year, even if growth is very high," he said.

Even though there is an increasing level of optimism in the market, it will be a very cautious approach that companies will follow. More stringent hiring criteria will be the new trend. This also signifies the maturing of the market, said analysts.

"The recovery period is going to be characterised by cautious optimism and companies will continue to look closely at their cost structures for a long time to come. The market will be far more mature and measured with employers taking more time to carefully consider their hiring requirements, plans and strategies," said O'Reilly.

"Employers are in a position to be far more selective in the current market. The selection process has therefore become much more stringent and challenging in many cases," she said.

Sayer of Robert Half said: "We have seen employers become more selective, this is due to the number of candidates in the market. In the last upturn there were many jobs and few candidates, so employers had to compromise on skills sets to fill the jobs. Now, they can find the skills sets they are looking for and have a good shortlist from which to select the right candidate."

"Employers are not necessarily more satisfied with résumés, but they are becoming more selective of the candidates that they progress to interview stage. We see employers looking for qualifications, standards of training, and stability within candidates' most recent positions," he added.

In times of high growth some companies resorted to fast track hiring without much consideration but this process is outdated now.

"Earlier, some companies followed the process of fast-track hiring. The growth rate was so good that companies did not bother, giving more money to under-qualified people," said Manolopoulos, adding that in certain cases "some candidates with good CVs were hired after a phone call".

"The companies that start hiring will be doing a careful selection. Earlier, there was so much demand in the market that companies were hiring people who did not meet the requirements of the position they were hired for. Hiring criteria has become more elaborate now," he said.

Accountability of work will be another trait to determine job retention now. "Companies were not bothered if their employees were doing their job properly. The money was just coming and business was growing anyways. This will not be the case now and in the future people will be held accountable for their work," said Manolopoulos.

On money matters, experts said salaries will also be more realistic now but will also depend on the individual negotiations between the hiring company and the candidate. However, good talent will always be valued.

"There has been deflation in the salaries offered in the UAE. It has been an employer's market; there are many candidates chasing fewer jobs so employers and employees are more realistic about packages. Employers are open to paying the current market rate for a candidate who has the right skills for the role," said Sayer.

According to Manolopoulos: "Salaries in Abu Dhabi and in certain sectors are relatively higher but in most cases it depends on negotiations between the companies and the candidates.

Companies are not paying too low because they know if they do this they will not find the right candidate.

"Executives with a proven professional track record will negotiate with hiring companies. Going forward, we don't see any significant drop in salaries but packages will be adjusted according to the calibre of the executives and not positions. Moreover, packages will be connected to inflation," he said.

O'Reilly said there will be more flexibility in this regard, but employers are likely to be cautious and cost-sensitive for the foreseeable future.

Regarding the kind of people that the UAE will require in times to come, she said: "In keeping with the reduced risk-appetite in the market generally, there is an increased preference for proven and experienced professionals with solid references and consistent work histories. Regional experience and knowledge are also a valuable attribute."

"We are seeing an increase in demand for finance and accounting professionals. Coming out of the downturn, employers are looking to up-skill their finance functions to implement stronger financial controls. The downturn revealed significant gaps in the skills and ability of existing teams to cope with the financial crisis," said Sayer.


Global job markets

The International Labour Organisation (ILO) had predicted early in the year of massive job losses due to the sharp contraction in global economic activity.

According to ILO estimates, global unemployment could rise by between 29 million (lowest scenario) and 59 million (highest scenario) people in 2009 versus 2007, with a middle scenario of 39 million.

However, latest figures and survey seem to be indicating problems in the job market may be easing. Job board CareerBuilder.com and Robert Half International in their latest survey found 53 per cent of employers in the US plan to hire full-time staff in the next 12 months, and 40 per cent plan to hire contract, temporary or project professionals.

According to ADP Employer Services in the US, this month private employers in the country cut 298,000 jobs in August, below 360,000 job losses seen in July.

The latest global Manpower Employment Outlook Survey also gives a ray of home. The fourth quarter of 2009 will continue to challenge job seekers in labour markets around the world, but employers hiring expectations have improved, the survey said.

Employers in 17 of 35 countries and territories surveyed expect some positive hiring activity in the quarter ahead. Hiring plans are strongest in the emerging markets of India and Brazil, while job prospects remain weak in the United States.

Across Europe, hiring sentiments remain generally negative but forecasts have improved in nearly half of the countries compared to the third-quarter forecast. Eurozone unemployment hit a 10-year high of 9.5 per cent in July and is seen rising further before a nascent economic recovery supports the job market.

 

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