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Recession and Employment in the Gulf




                                       July 2009


                                                   0
Introduction




    • This research study is intended to provide an overview of key employment and
      recruitment trends in the Gulf region since the start of the international financial
      crisis, and to give an indication of how the labour market is likely to evolve going
      forward.


    • The study is aimed at corporate decision makers, government authorities as well
      as professionals employed or interested in working in the region.


    • The findings presented in this study are based on a combination of data from
      GulfTalent.com’s recruitment database, interviews with human resource
      managers, leading economic sources as well as regional press reports.




                                                                                             1
Contents




      • Economic Situation…….........................................…………… 3

      • Impact on Employment ………….………………………………..7

      • Recruitment Trends………………………………………………11

      • Compensation Trends…………………………….…………….. 19

      • Future Outlook…………………………………………………… 25




                                                                               2
Economic Situation




                     3
Years of massive growth, fueled by high oil prices, have come to a halt




     Crude Oil Price                                              GCC Economic Growth
     USD per Barrel                                               2005 - 2009


                                                                   6.8%
      150                                                                                  6.2%
                                                                           5.5%    5.6%



      100




       50


                                                                                                     0.2%

        0
                                                                  2005    2006    2007    2008      2009
         2001        2003        2005        2007          2009                                   Forecast




Source: Dow Jones & Company, Economist Intelligence Unit

                                                                                                             4
Gulf economies are still expected to perform better than most others,
due to high government spending and low exposure to risky assets


                    Global GDP Growth
                    2009 Forecast



                                                 China                                                                6.8%

                                                  India                                                           5.5%

                                                 GCC*                                              0.2%

                                            ASEAN**                             -1.9%

                                                    US                        -2.9%

                                     Eastern Europe                        -3.6%

                                       Latin America                       -3.7%

                                    Western Europe                      -4.4%

                                               Russia                 -5.0%

                                                Japan           -7.0%




Source: Economist Intelligence Unit
* Gulf Cooperation Council, consisting of Saudi Arabia, Kuwait, Bahrain, Qatar, Oman and the UAE
** Association of South East Asian Nations, consisting of Thailand, Indonesia, Singapore, Malaysia, the Philippines, and five other Asian states   5
Qatar continues to enjoy the highest growth rate in the region,
thanks to the on-going development of its huge gas reserves


GCC Economic Growth

                                      2009 Forecast            2008 Actual




                             Qatar                      9.6%     13.4 %


                           Bahrain               3.1%             6.3 %


                             Oman              1.9%               6.4 %


                            Kuwait          -0.7%                 8.5 %


                     Saudi Arabia           -1.0%                 4.2 %


                              UAE           -1.8%                 7.4 %



Source: Economist Intelligence Unit

                                                                             6
Impact on Employment




                       7
With demand for talent shrinking, the balance of power has shifted
from candidates to employers



    Emerging Practices              Key Observations


                                    • Cuts visible across the region, with the highest concentration in Dubai
          Job Cuts
                                    • Top management among those affected by cuts



                                    • Longer working hours, partly as a result of staff reductions
       Increased
                                    • Mandatory relocation to less popular destinations
      Work Pressure
                                    • Sharp cuts in training budgets


                                    • Majority of firms offering no pay increase
    Pressure on Pay                 • Some cuts in allowances
                                    • Many new recruits hired on lower pay than peers



Source: Press reports, Interviews

                                                                                                                8
A largely expatriate workforce has protected the region from severe
domestic unemployment, partly exporting the problem overseas



      Expatriate Workforce                                    Impact of Gulf Downturn on Other Countries
      As % of total workforce*


       UAE                                              90%   • Many expatriates returning home following redundancy,
                                                                adding to unemployment in their countries
      Qatar                                             89%
                                                              • Exodus accelerated by government rules allowing expats
     Kuwait                                         81%         maximum 30 days stay in the country after termination


    Bahrain                                 59%               • Reduced flow of remittances by expatriates

     Saudi                            47%                     • Key countries affected: India, Egypt, Jordan, Philippines –
     Arabia
                                                                due to their high populations of expatriates in the Gulf

      Oman                      33%




Source: Nationalisation Surveys, Press reports
* Based on 2006, the latest year for which data available
                                                                                                                              9
Some Gulf governments have taken action to minimise the impact of
corporate redundancies on their nationals


Measures to Limit Unemployment of Nationals

           Country                    Key Measures Announced



                        UAE       •    Companies that are downsizing advised to start with expats
                                  •    Ban on terminating employment of UAE nationals



                                  •    Significant increase in Kuwaitisation targets for banks
                    Kuwait        •    Pressure on firms receiving government assistance, to hire more Kuwaitis
                                  •    Plan to impose mandatory compensation for Kuwaiti employees being laid off




               Saudi Arabia       •    Private sector warned against using the crisis as pretext to fire Saudis
                                  •    Companies instructed to start with expatriates first if terminating staff



Source: Press reports

                                                                                                                    10
Recruitment Trends




                     11
With fewer opportunities and rising concerns about job security,
staff turnover has fallen significantly across the region




                  Candidate Perspective                           Impact on Recruitment


•   Job search has become much more challenging            A tendency to hold on to secure jobs,
                                                           rather than actively searching for better
•   Concern about the risk of ‘last-in first-out’ in the
                                                           opportunities – except when the
    event of downsizing
                                                           employer is believed to be in financial
•   Concern that any sign of disloyalty to existing        trouble
    employer may lead to loss of position




Source: Interviews with HR Managers

                                                                                                       12
The downturn has reduced recruitment activity by employers, as well as
changing the way it is conducted



               Employer Perspective                               Impact on Recruitment


 •    Headcount growth targets low or negative              •   Volume: Reduced recruitment
 •    Lower staff turnover / Higher retention


 •    Reduced recruitment budgets                           •   Channel: Shift to lower cost recruitment
 •    Increased demand for cost transparency                    channels (e.g. online)


 •    Much higher calibre of candidates expected            •   Approach: Shift from public advertising of
 •    Concern that ‘active’ jobseekers may be ‘under-           jobs to headhunting / database search – in
      performers’ expecting imminent redundancy                 order to discreetly target high-calibre passive
 •    Concern that visible hiring activity may complicate       candidates
      internal communication of staff cuts




Source: Interviews with HR Managers

                                                                                                                  13
Dubai’s share of regional recruitment activity has fallen, while
Abu Dhabi, Qatar and Saudi Arabia have seen a relative increase


Recruitment Volume by Location
% of vacancies advertised on GulfTalent.com *


                                           Oman               2%                                                3%
                                          Bahrain             7%                                                4%
                                                                                                                7%
                                           Kuwait            10%
                                                                                                               13%
                                            Qatar             9%


                                   Saudi Arabia              15%                                               20%

                                          UAE
                                                             14%
                              (excluding Dubai)
                                                                                                               23%




                                            Dubai            43%
                                                                                                               30%




                                                       2008 (First Half)                                 2009 (First Half)


Source: GulfTalent.com
* Based on 12,000 vacancies advertised by employers and recruitment agencies on GulfTalent.com website over the specified period
Note: Internet penetration and prevalence of online recruitment varies across the countries                                        14
More expatriates are exiting the UAE and Bahrain than last year. However,
the desire to leave the UAE remains the lowest in the region


Outward Mobility by Country
% of expats within the country considering employment in other GCC countries *


                                                                                                                   92%

                                                                                                                         84%

                                                                         74% 74%       75%         75% 78%
                                                            68%
                                                                                             66%

                                                                   55%


                                                                                                                                        2008 (First Half)
                                                                                                                                        2009 (First Half)

                                                  26%

                                           16%




                                            UAE         Saudi Arabia     Kuwait      Qatar         Bahrain       Oman

                    Change in
                    Outward Mobility:      +10%             -13%          0%          -9%           +3%            -8%


Source: GulfTalent.com
* Job applications submitted for vacancies in other GCC countries, as a percentage of all job applications submitted by expat professionals within the country. Based on
a total of 1.4 million job applications submitted on GulfTalent.com over the specified period. The analysis does not take into account mobility to non-GCC countries       15
Across the region, demand for Investment, Administration and
Marketing professionals has seen the biggest fall

Skills Least in Demand


 Skill Category             Job Titles & Keywords Most Searched                                                   Relative Change in No. of Searches
                                                                                                                  2009 First Half vs. 2008 First Half *


          Investment        Private Equity, Asset Management, Portfolio Manager, Fund Manager                         -48%


     Administration         Executive Secretary, PA,, Administration Manager, Document Controller                      -47%


           Marketing        Marketing Director, Branding, Advertising, Media, Communications                           -46%


 HR & Recruitment           HR Director, HR Manager, Training, Compensation, Recruitment Manager                              -34%


         Accounting         Accountant, Payroll, Project Accountant, Chartered Accountant, CPA                                  -32%


                Retail      Head of Retail, Retail Manager, Merchandiser, Fashion, Hypermarket                                     -26%


                Sales       Sales Manager, Relationship Manager, Business Development Manager                                          -23%


Source: GulfTalent.com
* Based on a total of 700,000 online searches conducted by employers and recruiters on GulfTalent.com’s CV database during the specified periods
                                                                                                                                                          16
Higher government spending in infrastructure projects across the region
appears to have increased the demand for related skills

Skills Most in Demand



       Skill Category            Job Titles & Keywords Most Searched                                              Relative Change in No. of Searches
                                                                                                                  2009 First Half vs. 2008 First Half *




          Infrastructure        Airport, Terminal, Highway Design, Bridge Engineer, Urban Planner                                                  142%




                    Audit       Auditor, Audit Manager, Head of Internal Audit                                                             25%




General Management              CEO, Director, General Manager, Operations Manager                                                       20%




Source: GulfTalent.com
* Based on a total of 700,000 online searches conducted by employers and recruiters on GulfTalent.com’s CV database during the specified periods
                                                                                                                                                          17
More recruitment activity is being focused on mid-level and senior
professionals


Recruitment Trends – By Seniority


        Senior Recruitment *                                                      Key Trends
        % of searches targeting 35-50 year age group


      25%
                                                                                  • Increased focus on senior and more experienced
                                                                                    candidates

      20%                                                                         • Focus on candidates who are perceived to add value ‘from
                                                                                    day one’

                                                                                  • Younger candidates requiring longer term investment and
      15%
                                                                                    training increasingly overlooked


      10%
            Q1        Q2           Q3          Q4          Q1           Q2

            2008                                           2009


Source: GulfTalent.com
* Based on a total of 1.1 million CV searches conducted by employers and recruitment agencies on GulfTalent.com’s database of candidates over the specified period
                                                                                                                                                                     18
Compensation Trends




                      19
Recent appreciation of dollar-pegged regional currencies has increased the
value of expatriate salaries


US Dollar Appreciation
12-month period to 30 June 2009




       British Pound                            21%


     Pakistani Rupee                           20%
                                                      The value of most expatriates’
    Australian Dollar                          20%
                                                      compensation packages has
     Canadian Dollar                     14%
                                                      increased sharply in terms of their
       Indian Rupee                     13%           home currencies, giving them an
                Euro                   12%            effective pay rise of 5 to 20

     Philippine Peso              8%
                                                      percent compared to last year

     Egyptian Pound         5%




Source: OANDA

                                                                                            20
Double-digit inflation of recent years has given way to stable or falling
prices




          Cost of Living                                                        2009 Inflation Forecast               2008 Actual



                                                                              Kuwait                           7.0%      10.6%
      • Rents: Falling in many cities (e.g.
        20-40% fall in Dubai & Doha)                                           Oman                            6.8%      12.5%

      • Food: Stable or falling prices, due to
                                                                                 UAE                    4.5%             20.0%
        fall in global food commodities
        (wheat, corn, etc.)
                                                                       Saudi Arabia               2.8%                    9.9%
      • Consumer goods: Falling cost of
        imports, due to strength of currency                                 Bahrain             1.8%                     7.0%


                                                                                Qatar         -2.8%                      15.1%




Source: Financial Times, Economist Intelligence Unit, Colliers International, Asteco

                                                                                                                                    21
Rising unemployment across the world is increasing the supply of
talent available to employers in the Gulf


Unemployment Rate *
2008 - 2009

                                                                    Canada
    8%


                                                                            UK
    7%
                                                                                                        • Domestic opportunities available in
                                                                                                          countries supplying talent to the Gulf
    6%
                                                                                                          becoming fewer and more competitive
                                                                   Australia

                                                                                                        • Growing interest in the Gulf as an
    5%                                                                                                    alternative destination for work

                                                                                                        • Reduced tendency by expatriates currently
    4%
                                                                                                          in the Gulf to return home


    3%
     Jan 08                          Jul 08                        Jan 09




Source: Economist Intelligence Unit
* Recent unemployment data for other major sources of talent for the Middle East (such as South Africa, India and the Philippines) has not been available
                                                                                                                                                            22
Given the market conditions, salaries in the Gulf are expected to remain
flat in the near term


                                     Low Inflation
                                     The cost of living this year is stable, and in
                                     some cases falling, particularly in rents




Strong Currency                                                                       Limited Competition for Talent
Gulf currencies, which are mostly                                                     Slowdown in the regional economy
                                                     No upward
pegged to the US Dollar, have                        pressure on                      has reduced demand for staff
appreciated sharply, increasing                        salaries
the value of expatriates’ salaries




                                     Rising Unemployment Worldwide
                                     Increased unemployment in source countries
                                     has made many more professionals interested
                                     in working in the Gulf
                                                                                                                         23
Despite limited pay rises, some expats are seeing their saving
potential increase relative to last year

Short-Term Financial Impact of Recession on Expatriates



                                            Winners                              Losers


   Pay Structure :             Mostly fixed salary (e.g.             Mostly commission / variable pay
                               accounting, administration staff)     (e.g. sales staff)


   Location :                  Cities with rapidly falling rents     Cities with relatively strong real
                               (e.g. Dubai, Doha)                    estate markets (e.g. Abu Dhabi)


   Home Currency :             Countries with weakening currencies   Countries with stable currencies
                               (e.g. UK, Australia, Euro-zone)       against US dollar (e.g. South Africa)




                                           Net Increase                           Net Decrease
                                        In Saving Potential                    In Saving Potential

                                                                                                             24
Future Outlook




                 25
While job losses appear to have slowed down, recruitment activity in
the short term is likely to remain slow

Short-Term Outlook

                             Short-term Trends


                         •   Stabilised among regional companies
      Job Cuts           •   More job cuts expected among multi-nationals undergoing restructuring
                         •   Some job cuts among regional firms undergoing merger and consolidation



                         •   More regulatory pressure on companies to hire nationals, as more
   Nationalisation           young nationals enter the workforce, with too few jobs to
                             accommodate all of them



                         •   Pay rises over the next 12 months expected to be minimal
    Compensation         •   Employees’ saving potential to remain stable, due to low inflation, but
                             subject to movements in US dollar and pay structure (fixed vs. variable)




                                                                                                        26
Economists expect the region to return to healthy growth next year



Future Outlook

                  2010 Economic Growth Forecast



                                                             • Employment activity expected to
              Qatar                                  23.5%
                                                               recover from early 2010
             Kuwait                           4.4%
                                                             • Recruitment volumes may not
                UAE                          4.2%              return to boom levels for some
                                                               time
              Oman                       3.9%

                                                             • The speed of recovery will depend
            Bahrain                    3.3%
                                                               largely on global trends,
                                      3.1%
                                                               particularly the price of crude oil
     Saudi Arabia



Source: Economist Intelligence Unit

                                                                                                     27
Summary

   • With the global recession and the fall in oil prices, most Gulf countries are expected
     to have limited economic growth in 2009.


   • Many companies in the region have responded with staff cuts and recruitment
     freezes, with professionals in investment, administration and marketing functions
     most affected. Demand for infrastructure and audit professionals has increased.


   • The UAE, and Dubai in particular, has seen its share of vacancies fall, with some
     residents seeking opportunities in other Gulf states. However, it still has significant
     recruitment levels and remains the region’s most popular destination.


   • Limited pay increase is expected in the near term, due to falling inflation, reduced
     demand, rising global unemployment and strength of the US dollar.


   • Economic growth is expected to recover in 2010, with employment activity gaining
     momentum as a result, but in the long run remaining dependent on the oil price.


                                                                                               28
About GulfTalent.com




                    GulfTalent.com is the Middle East’s leading online recruitment portal, with a database of
                    over 1 million professionals covering all sectors and job categories. It serves as the primary
                    source of both national and expatriate talent to over 2,000 employers and recruitment
                    agencies across the region.

                    Headquartered in Dubai, GulfTalent.com covers the markets of Saudi Arabia, Kuwait,
                    Qatar, Bahrain, Oman, Egypt, Lebanon, Jordan and the United Arab Emirates.

                    Further information is available at:                   www.gulftalent.com
                                                                           Tel: +971 4 367 2084




 Disclaimer & Copyright

 This document should be used for information purposes only. GulfTalent.com makes no claims or warranties regarding the accuracy or completeness of the
 information provided, and accepts no liability for any use made thereof. The recipient is solely responsible for the use of the information contained herein.

 © GulfTalent.com 2009. All rights reserved.
                                                                                                                                                                 29

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Recession And Employment In The Gulf

  • 1. Recession and Employment in the Gulf July 2009 0
  • 2. Introduction • This research study is intended to provide an overview of key employment and recruitment trends in the Gulf region since the start of the international financial crisis, and to give an indication of how the labour market is likely to evolve going forward. • The study is aimed at corporate decision makers, government authorities as well as professionals employed or interested in working in the region. • The findings presented in this study are based on a combination of data from GulfTalent.com’s recruitment database, interviews with human resource managers, leading economic sources as well as regional press reports. 1
  • 3. Contents • Economic Situation…….........................................…………… 3 • Impact on Employment ………….………………………………..7 • Recruitment Trends………………………………………………11 • Compensation Trends…………………………….…………….. 19 • Future Outlook…………………………………………………… 25 2
  • 5. Years of massive growth, fueled by high oil prices, have come to a halt Crude Oil Price GCC Economic Growth USD per Barrel 2005 - 2009 6.8% 150 6.2% 5.5% 5.6% 100 50 0.2% 0 2005 2006 2007 2008 2009 2001 2003 2005 2007 2009 Forecast Source: Dow Jones & Company, Economist Intelligence Unit 4
  • 6. Gulf economies are still expected to perform better than most others, due to high government spending and low exposure to risky assets Global GDP Growth 2009 Forecast China 6.8% India 5.5% GCC* 0.2% ASEAN** -1.9% US -2.9% Eastern Europe -3.6% Latin America -3.7% Western Europe -4.4% Russia -5.0% Japan -7.0% Source: Economist Intelligence Unit * Gulf Cooperation Council, consisting of Saudi Arabia, Kuwait, Bahrain, Qatar, Oman and the UAE ** Association of South East Asian Nations, consisting of Thailand, Indonesia, Singapore, Malaysia, the Philippines, and five other Asian states 5
  • 7. Qatar continues to enjoy the highest growth rate in the region, thanks to the on-going development of its huge gas reserves GCC Economic Growth 2009 Forecast 2008 Actual Qatar 9.6% 13.4 % Bahrain 3.1% 6.3 % Oman 1.9% 6.4 % Kuwait -0.7% 8.5 % Saudi Arabia -1.0% 4.2 % UAE -1.8% 7.4 % Source: Economist Intelligence Unit 6
  • 9. With demand for talent shrinking, the balance of power has shifted from candidates to employers Emerging Practices Key Observations • Cuts visible across the region, with the highest concentration in Dubai Job Cuts • Top management among those affected by cuts • Longer working hours, partly as a result of staff reductions Increased • Mandatory relocation to less popular destinations Work Pressure • Sharp cuts in training budgets • Majority of firms offering no pay increase Pressure on Pay • Some cuts in allowances • Many new recruits hired on lower pay than peers Source: Press reports, Interviews 8
  • 10. A largely expatriate workforce has protected the region from severe domestic unemployment, partly exporting the problem overseas Expatriate Workforce Impact of Gulf Downturn on Other Countries As % of total workforce* UAE 90% • Many expatriates returning home following redundancy, adding to unemployment in their countries Qatar 89% • Exodus accelerated by government rules allowing expats Kuwait 81% maximum 30 days stay in the country after termination Bahrain 59% • Reduced flow of remittances by expatriates Saudi 47% • Key countries affected: India, Egypt, Jordan, Philippines – Arabia due to their high populations of expatriates in the Gulf Oman 33% Source: Nationalisation Surveys, Press reports * Based on 2006, the latest year for which data available 9
  • 11. Some Gulf governments have taken action to minimise the impact of corporate redundancies on their nationals Measures to Limit Unemployment of Nationals Country Key Measures Announced UAE • Companies that are downsizing advised to start with expats • Ban on terminating employment of UAE nationals • Significant increase in Kuwaitisation targets for banks Kuwait • Pressure on firms receiving government assistance, to hire more Kuwaitis • Plan to impose mandatory compensation for Kuwaiti employees being laid off Saudi Arabia • Private sector warned against using the crisis as pretext to fire Saudis • Companies instructed to start with expatriates first if terminating staff Source: Press reports 10
  • 13. With fewer opportunities and rising concerns about job security, staff turnover has fallen significantly across the region Candidate Perspective Impact on Recruitment • Job search has become much more challenging A tendency to hold on to secure jobs, rather than actively searching for better • Concern about the risk of ‘last-in first-out’ in the opportunities – except when the event of downsizing employer is believed to be in financial • Concern that any sign of disloyalty to existing trouble employer may lead to loss of position Source: Interviews with HR Managers 12
  • 14. The downturn has reduced recruitment activity by employers, as well as changing the way it is conducted Employer Perspective Impact on Recruitment • Headcount growth targets low or negative • Volume: Reduced recruitment • Lower staff turnover / Higher retention • Reduced recruitment budgets • Channel: Shift to lower cost recruitment • Increased demand for cost transparency channels (e.g. online) • Much higher calibre of candidates expected • Approach: Shift from public advertising of • Concern that ‘active’ jobseekers may be ‘under- jobs to headhunting / database search – in performers’ expecting imminent redundancy order to discreetly target high-calibre passive • Concern that visible hiring activity may complicate candidates internal communication of staff cuts Source: Interviews with HR Managers 13
  • 15. Dubai’s share of regional recruitment activity has fallen, while Abu Dhabi, Qatar and Saudi Arabia have seen a relative increase Recruitment Volume by Location % of vacancies advertised on GulfTalent.com * Oman 2% 3% Bahrain 7% 4% 7% Kuwait 10% 13% Qatar 9% Saudi Arabia 15% 20% UAE 14% (excluding Dubai) 23% Dubai 43% 30% 2008 (First Half) 2009 (First Half) Source: GulfTalent.com * Based on 12,000 vacancies advertised by employers and recruitment agencies on GulfTalent.com website over the specified period Note: Internet penetration and prevalence of online recruitment varies across the countries 14
  • 16. More expatriates are exiting the UAE and Bahrain than last year. However, the desire to leave the UAE remains the lowest in the region Outward Mobility by Country % of expats within the country considering employment in other GCC countries * 92% 84% 74% 74% 75% 75% 78% 68% 66% 55% 2008 (First Half) 2009 (First Half) 26% 16% UAE Saudi Arabia Kuwait Qatar Bahrain Oman Change in Outward Mobility: +10% -13% 0% -9% +3% -8% Source: GulfTalent.com * Job applications submitted for vacancies in other GCC countries, as a percentage of all job applications submitted by expat professionals within the country. Based on a total of 1.4 million job applications submitted on GulfTalent.com over the specified period. The analysis does not take into account mobility to non-GCC countries 15
  • 17. Across the region, demand for Investment, Administration and Marketing professionals has seen the biggest fall Skills Least in Demand Skill Category Job Titles & Keywords Most Searched Relative Change in No. of Searches 2009 First Half vs. 2008 First Half * Investment Private Equity, Asset Management, Portfolio Manager, Fund Manager -48% Administration Executive Secretary, PA,, Administration Manager, Document Controller -47% Marketing Marketing Director, Branding, Advertising, Media, Communications -46% HR & Recruitment HR Director, HR Manager, Training, Compensation, Recruitment Manager -34% Accounting Accountant, Payroll, Project Accountant, Chartered Accountant, CPA -32% Retail Head of Retail, Retail Manager, Merchandiser, Fashion, Hypermarket -26% Sales Sales Manager, Relationship Manager, Business Development Manager -23% Source: GulfTalent.com * Based on a total of 700,000 online searches conducted by employers and recruiters on GulfTalent.com’s CV database during the specified periods 16
  • 18. Higher government spending in infrastructure projects across the region appears to have increased the demand for related skills Skills Most in Demand Skill Category Job Titles & Keywords Most Searched Relative Change in No. of Searches 2009 First Half vs. 2008 First Half * Infrastructure Airport, Terminal, Highway Design, Bridge Engineer, Urban Planner 142% Audit Auditor, Audit Manager, Head of Internal Audit 25% General Management CEO, Director, General Manager, Operations Manager 20% Source: GulfTalent.com * Based on a total of 700,000 online searches conducted by employers and recruiters on GulfTalent.com’s CV database during the specified periods 17
  • 19. More recruitment activity is being focused on mid-level and senior professionals Recruitment Trends – By Seniority Senior Recruitment * Key Trends % of searches targeting 35-50 year age group 25% • Increased focus on senior and more experienced candidates 20% • Focus on candidates who are perceived to add value ‘from day one’ • Younger candidates requiring longer term investment and 15% training increasingly overlooked 10% Q1 Q2 Q3 Q4 Q1 Q2 2008 2009 Source: GulfTalent.com * Based on a total of 1.1 million CV searches conducted by employers and recruitment agencies on GulfTalent.com’s database of candidates over the specified period 18
  • 21. Recent appreciation of dollar-pegged regional currencies has increased the value of expatriate salaries US Dollar Appreciation 12-month period to 30 June 2009 British Pound 21% Pakistani Rupee 20% The value of most expatriates’ Australian Dollar 20% compensation packages has Canadian Dollar 14% increased sharply in terms of their Indian Rupee 13% home currencies, giving them an Euro 12% effective pay rise of 5 to 20 Philippine Peso 8% percent compared to last year Egyptian Pound 5% Source: OANDA 20
  • 22. Double-digit inflation of recent years has given way to stable or falling prices Cost of Living 2009 Inflation Forecast 2008 Actual Kuwait 7.0% 10.6% • Rents: Falling in many cities (e.g. 20-40% fall in Dubai & Doha) Oman 6.8% 12.5% • Food: Stable or falling prices, due to UAE 4.5% 20.0% fall in global food commodities (wheat, corn, etc.) Saudi Arabia 2.8% 9.9% • Consumer goods: Falling cost of imports, due to strength of currency Bahrain 1.8% 7.0% Qatar -2.8% 15.1% Source: Financial Times, Economist Intelligence Unit, Colliers International, Asteco 21
  • 23. Rising unemployment across the world is increasing the supply of talent available to employers in the Gulf Unemployment Rate * 2008 - 2009 Canada 8% UK 7% • Domestic opportunities available in countries supplying talent to the Gulf 6% becoming fewer and more competitive Australia • Growing interest in the Gulf as an 5% alternative destination for work • Reduced tendency by expatriates currently 4% in the Gulf to return home 3% Jan 08 Jul 08 Jan 09 Source: Economist Intelligence Unit * Recent unemployment data for other major sources of talent for the Middle East (such as South Africa, India and the Philippines) has not been available 22
  • 24. Given the market conditions, salaries in the Gulf are expected to remain flat in the near term Low Inflation The cost of living this year is stable, and in some cases falling, particularly in rents Strong Currency Limited Competition for Talent Gulf currencies, which are mostly Slowdown in the regional economy No upward pegged to the US Dollar, have pressure on has reduced demand for staff appreciated sharply, increasing salaries the value of expatriates’ salaries Rising Unemployment Worldwide Increased unemployment in source countries has made many more professionals interested in working in the Gulf 23
  • 25. Despite limited pay rises, some expats are seeing their saving potential increase relative to last year Short-Term Financial Impact of Recession on Expatriates Winners Losers Pay Structure : Mostly fixed salary (e.g. Mostly commission / variable pay accounting, administration staff) (e.g. sales staff) Location : Cities with rapidly falling rents Cities with relatively strong real (e.g. Dubai, Doha) estate markets (e.g. Abu Dhabi) Home Currency : Countries with weakening currencies Countries with stable currencies (e.g. UK, Australia, Euro-zone) against US dollar (e.g. South Africa) Net Increase Net Decrease In Saving Potential In Saving Potential 24
  • 27. While job losses appear to have slowed down, recruitment activity in the short term is likely to remain slow Short-Term Outlook Short-term Trends • Stabilised among regional companies Job Cuts • More job cuts expected among multi-nationals undergoing restructuring • Some job cuts among regional firms undergoing merger and consolidation • More regulatory pressure on companies to hire nationals, as more Nationalisation young nationals enter the workforce, with too few jobs to accommodate all of them • Pay rises over the next 12 months expected to be minimal Compensation • Employees’ saving potential to remain stable, due to low inflation, but subject to movements in US dollar and pay structure (fixed vs. variable) 26
  • 28. Economists expect the region to return to healthy growth next year Future Outlook 2010 Economic Growth Forecast • Employment activity expected to Qatar 23.5% recover from early 2010 Kuwait 4.4% • Recruitment volumes may not UAE 4.2% return to boom levels for some time Oman 3.9% • The speed of recovery will depend Bahrain 3.3% largely on global trends, 3.1% particularly the price of crude oil Saudi Arabia Source: Economist Intelligence Unit 27
  • 29. Summary • With the global recession and the fall in oil prices, most Gulf countries are expected to have limited economic growth in 2009. • Many companies in the region have responded with staff cuts and recruitment freezes, with professionals in investment, administration and marketing functions most affected. Demand for infrastructure and audit professionals has increased. • The UAE, and Dubai in particular, has seen its share of vacancies fall, with some residents seeking opportunities in other Gulf states. However, it still has significant recruitment levels and remains the region’s most popular destination. • Limited pay increase is expected in the near term, due to falling inflation, reduced demand, rising global unemployment and strength of the US dollar. • Economic growth is expected to recover in 2010, with employment activity gaining momentum as a result, but in the long run remaining dependent on the oil price. 28
  • 30. About GulfTalent.com GulfTalent.com is the Middle East’s leading online recruitment portal, with a database of over 1 million professionals covering all sectors and job categories. It serves as the primary source of both national and expatriate talent to over 2,000 employers and recruitment agencies across the region. Headquartered in Dubai, GulfTalent.com covers the markets of Saudi Arabia, Kuwait, Qatar, Bahrain, Oman, Egypt, Lebanon, Jordan and the United Arab Emirates. Further information is available at: www.gulftalent.com Tel: +971 4 367 2084 Disclaimer & Copyright This document should be used for information purposes only. GulfTalent.com makes no claims or warranties regarding the accuracy or completeness of the information provided, and accepts no liability for any use made thereof. The recipient is solely responsible for the use of the information contained herein. © GulfTalent.com 2009. All rights reserved. 29