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Some UAE jobs are coming back but job losses, salary cuts persist

Some UAE employees are fully salaried, but as far as paycheck cuts varying between 30-50%, and job losses, it’s for the most part same old same old, this year and perhaps the next

There has been a pickup in recruitments since the start of September, restricted to a handful of sectors Mid-level managers across industries will spend the next few weeks in quite a bit of distress Nearly half of the population in the UAE are currently facing a pay cut

The World Economic Forum (WEF) reported that according to the UN’s International Labour Organisation (ILO), 1.6 billion informal economy workers could suffer “massive damage” to their livelihoods. The COVID-19 pandemic in the second quarter of 2020 may cost the equivalent of 305 million full-time jobs.

But as the UAE economy continues to open up, new jobs follow suit albeit with lower salary scales and geared for local UAE residents, not those living abroad.

Some UAE employees are fully salaried, but as far as paycheck cuts varying between 30-50%, and job losses,  it’s for the most part same old same old, this year and perhaps the next.   

Read: Applying for jobs daily? Not getting hired? You may have missed this key clue

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There has been a pickup in recruitments since the start of September, restricted to a handful of sectors. “But [these are] at a cost base which is 15-20% lower on fixed pay for similar roles but offering higher commission on lower thresholds for sales and service jobs in particular,” said Vijay Gandhi, Regional Director at Korn Ferry Digital, the consultancy, as per Gulf News.

Recruitment experts in the UAE have said salaries dropped by up to 30% but as businesses start running at full capacity, hiring is now picking up.

Applicants are likely to see vacancies in procurement, sales, e-commerce, legal service, life sciences, healthcare, and education, with several firms hiring talent already available in the local market, experts said.

Management and consultancy firms have observed an increase in recruitment activity in September. Though the hiring rate is still about 20% lower compared with the pre-COVID-19 period, more changes are expected in the coming months.

Jobs in sales, business development, marketing, and information technology are also emerging as businesses look for ways to recover losses.

 “As we move from traditional banking towards the digital age [there is a]…need for talent that is AI-driven to improve the overall processes from risk, credit, operations, and compliance roles and the impact of reduced branches,” said Gandhi.

Jon Ede, regional director for recruiting firm Michael Page Middle East, noted that most UAE businesses are hiring talent already based in the UAE to reduce risk, cost, and save time.

Read: The UAE has a new AI journo: Is artificial journalism a job taker?

Job losses, salary cuts, to continue 

Businesses that are reinstating full salaries have reduced their staff size and most of the cuts will continue to happen in the mid- and senior management levels.

Mid-level managers across industries will spend the next few weeks in quite a bit of distress. The head-chopping and threats of job losses have now moved from low-level employees to mid- and senior-levels, some of whom have responded by taking voluntary pay cuts.

The reinstating of full salaries continues to be a highly selective process. Employees in sectors such as physical retail are yet to get their full paychecks back.  Workforces in aviation and hospitality, real estate and construction, advertising, and media are also still some distance away from full entitlements.

Nearly half of the population in the UAE are currently facing a pay cut and most of them foreseeing the reductions to continue for the next six months, at least. 

In the UAE, 76% of 25 to 34-year olds would set up a second income stream. Moreover, 77% of all 18 to 44-year olds would reskill compared to only 56% of those aged 55 and over.

This observation was drawn based on a broader Standard Chartered survey done among 12,000 adults across twelve markets including the UAE. 

Etihad Airways will extend the period of reduced pay for its staff until the end of this year although at a lower 10% rate (Compared to 25% -50% earlier) and the airline has reintroduced staff allowances, according to a statement.  

Etihad Airways posted an H1 loss of $758 million.

Separately, Dubai’s Emirates airline said it’ll fully restore staff salaries from October.

Hospitals and clinics which are now operating at full capacity, are now handing out full salaries.

Professional services like accounting, law, and financial services seem to be responding faster and in a more positive way. 

Employers cannot reduce salaries permanently as per UAE Ministerial Resolution 279 of 2020, but it’s still a gray area about when they can continue blaming COVID-19 for these decisions.