Friday, April 01, 2005

Annual Salary Survey 2004: The role of employee perceptions of the UAE - Gulf Business

Labor supply and labor demand both increasing. Quantity up, wages level: inference supply is growing faster probably due to improving external perceptions of the UAE:

The growing international profile of the Gulf, especially Dubai, means there is no shortage of skilled labour in the region, a situation that places employers under little pressure to increase salaries for new or existing staff. “The amount of people who want to come and work here is colossal, so why put the salaries up?” asks Kirkwood.

Those new to the region, or investigating the Gulf’s possibilities from outside, are surprised by the current wage situation, reports Kirkwood.

Expecting either the development boom or reported regional instability to raise packages, they expect wage rates last seen five years ago. “A lot of newcomers still don’t believe it; they think they can go out and get more money than we do [for them]. But after a few interviews, they come in line,” she says.

Our graduates are competing in an international labor market. Read that again: international labor market.

Relaxation of rules on job switching benefiting employers more than employees?:

Increased international competition and the end of protectionist agency laws means that throughout the Gulf, jobs are becoming more accountable and skills driven and the employees that can fit them are being well recognised, says Martin L Mankowski, managing director of Hay Group Middle East.
Or I misinterpreting the quote above?:

The UAE labour laws were a hot topic in 2003, as the rules regarding which sectors were able to change employers appeared to tighten, resulting in six-month bans for a wider section of the workforce than ever before. The past 12 months have seen less job-hopping in the region, as salaries in many sectors have not been high enough for candidates to justify risking a ban by changing sponsors.

Job prospects for domestically produced university graduates and domestic job changers:

Specialised skills still need to be found internationally, says Koshy. “There is availability in the local market, but just not enough.”

In engineering, there is a need to recruit specialists with exposure to the latest systems and technology. Finance and banking positions are also still predominantly sourced externally, says Ingram, because it is difficult to find skills related to newer sectors such as wealth management and investment regionally. But energy, sales, marketing, and FMCG positions are being easily filled from within the region; employers are also placing more value on local experience, says Fernandes.

“The domestic pool of resources is increasing in size constantly, and we are able to source [talent] more economically from the domestic market place,” says Ingram, who believes doing so means candidates are more likely to be in line with cultural sensitivities, and the risk of failure is lessened. “When we first set up, two/thirds of our sourcing was done externally; today that is almost certainly reversed.”
More evidence that all else equal labor supply has grown due to improving Western employee perceptions of the UAE:

Although regional salaries in general remain flat, there is evidence they are still viewed as better than European and American alternatives. Although the dollar dropped dramatically in 2003 against both the euro and sterling, there has been almost no rise in dollar-linked Gulf salaries to compensate, say recruitment experts.

The difference between Gulf salaries, with allowances and their lower, taxable European counterparts have still been enough to make employees overlook the currency situation, says Imran Jawaid, business development head at AGN MAK Executive Resourcing. Europeans are beginning to voice concerns, says Ingram, but the most the unfavourable currency rates have done is prevent salaries from dropping, he says.


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