Dubai employers make cuts as downturn deepens (page 1 of 2)

Dubai's booming economy has, in recent years, created millions of jobs and led to a hiring frenzy in which many employers were struggling to find talent.

In the first quarter of 2008, 306,000 work permits were issued to foreigners.

However, the story began to change in October, when Damac Properties cut 200 jobs, or 2.5% of its workforce.

Other companies quickly followed suit, including Nakheel, which sacked 500 employees, and Shuaa Capital, which cut 21 jobs, or 9% of its manpower.

'The effects of the global financial crisis were delayed in reaching Dubai but there is no denying they are being felt today,' says Rabea Ataya, CEO, Bayt.com, the largest job site in the Middle East.

'The dramatic surge in recruitment activity seen early in 2008 as new sectors, particularly financial services and real estate, competed for top talent to fuel their growth, has abated significantly.'

'Isolated problem'

Markus Wiesner, Managing director of Mercer Middle East, agrees that the financial crisis has hit certain sectors very hard, but says the problem has been relatively isolated and overall most companies are handling it by recruiting fewer employees or being more conservative on salary increases.

'In Dubai, we are seeing a moderate slowdown in the growth curve rather than a complete stop or recession as in other countries. We are starting from a very high and aggressive growth level, so while yes, there has been a slowdown, this economy is not in a recession but has settled into a more moderate, or maybe a better word is more reasonable, growth rate right now.'

As the financial crisis has grown Bayt.com has received a dramatic increase in CVs at all career levels. The company has over two million CVs in its database, the bulk of which come from the GCC, Levant and North Africa.

About 20% are from outside the region, with the most noticeable spikes having been in CVs from the US and UK - particularly in the financial services and real estate sectors and amongst fresh graduates, especially MBAs.

In addition to an increase in quantity, there has been a noticeable increase in the quality of CVs, especially from overseas, as hiring activity in world capitals has shrunk.

Moreover, top talent has become more mobile in their job search and more amenable to considering employment opportunities in the GCC, which was already seeing a significant surge in interest from overseas talent even before the financial crisis, Ataya said.

Not surprisingly job listings have dropped noticeably on Bayt, but a main reason for this, Ataya says, is that employers are increasingly using the site's search functionality to find talent rather than posting an advertisement for a position, which is a trend the company began to witness even before the financial crisis arose.

Companies prune workforce

With a surplus of talent on the market, many employers are 'upgrading' and hiring talent at levels they were previously unable to easily find and/or afford in the local markets, Ataya noted.

Wiesner agrees, saying companies have told him they hired many people over the last couple of years 'just for the sake of recruiting to fill positions', but in doing so felt they had to compromise on the quality of people they hired. Now these organisations are looking at the downturn as an opportunity to trim staff that may be underperforming, and keep those people that they want to hold on to in the long run, he said.

Companies will differ in their approach to dealing with the financial crisis.