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Gulf jobs and pay rises hit by downturn, but remain ahead of most markets

Thursday, February 11th, 2010

The UAE and Kuwait have seen most job cuts and largest drops in pay rises. Real estate sector most affected, while audit professionals received the largest pay increases this year.

Professionals working in the Gulf region have been hit hard by the downturn, with almost two-thirds not receiving any pay increase and one in ten losing their jobs this year, according to research conducted by GulfTalent.com.

In its fifth annual survey of labour market trends in the region, entitled “Employment and Salary Trends in the Gulf 2009-2010″, GulfTalent.com provided the first comprehensive account of the impact of the downturn on recruitment and pay.

Based on findings of the study, average salary increases across the six Gulf countries over the 12-month period to August 2009 fell sharply to 6.2% compared with 11.4% over the same period last year.

The drop was most severe in the UAE, which fell from 13.6% to just 5.5% this year, largely due to its heavy exposure to the real estate sector. Kuwait also saw a significant drop in pay rises from 10.1% to 4.8%, after the value of its financial investments collapsed.

Pay rises in Saudi Arabia stood at 6.5%, compared with 9.8% last year, the smallest fall among GCC countries. Massive spending by the Saudi government on infrastructure projects this year has helped maintain economic activity.

In terms of job categories, audit professionals received the largest pay rises at 7.5%, as demand for their services surged following the collapse of major global institutions last year.

With recruitment no longer a priority for businesses, human resource professionals received the region’s lowest pay increases at just 4.8%.

According to the report, reduced demand for talent and greater availability of candidates both regionally and internationally has shifted the balance of power from candidates to employers, easing upward pressure on salaries. 60 percent of professionals surveyed did not receive any pay increase this year at all, compared with only 33 percent last year. Of raises awarded, many were due to the momentum of the previous year and had been approved before the full extent of the downturn had become apparent.

While pay rises have slowed relative to the boom years, they remain high in comparison to other parts of the world, as the region’s slowdown has been less severe than those of US and European markets. Base salaries in the UK and US this year are estimated to increase at just 1.5% and 3.7% respectively, according to international surveys.

Moreover, for the first time in years, average pay rises in most Gulf countries have exceeded the rate of inflation. As a result, some residents saw an improvement in their quality of life and saving potential, particularly in Dubai and Doha where rents have fallen by over 30 percent this year, the report said.

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New skills agencies staffed with ’same people doing same jobs’

Thursday, February 11th, 2010

Government plans to staff brand new skills agencies with “the same people doing the same jobs” are unlikely to create an improved skills system, has warned.

But the EEF warned the government’s decision to use LSC staff to run the new agencies would result in little more than a name change, failing to create the revolution needed to make the skills system more demand-led for employers.

In a letter to skills minister Kevin Brennan, seen by Personnel Today, the EEF hit out at the government for not creating the SFA in particular as a “substantially different body” to what already exists.

Nigel Fletcher, skills policy adviser at the EEF, told the magazine the chief executive and board of the SFA would be former LSC directors, while evidence given at a Business, Innovation and Skills Select Committee meeting yesterday indicated only three out of 3,200 LSC staff were yet to be assigned new posts within the agencies.

He said: “Our concern is [the SFA] is supposed to be a new funding agency with a different ethos to the LSC, and it does raise questions about how the change of culture will take place if it is the same people doing the same jobs.

“It certainly risks looking as though this is not as substantial a change as it should be.”

He added: “The LSC being disbanded and being replaced is a huge opportunity to create a properly demand-led system, and part of the reason for us raising this now is this is not an opportunity that can and should be missed.

“It would be a missed opportunity if the restructuring isn’t used to create a more responsive system.”

Speaking at the select committee, David Cragg, the interim chief executive of the SFA, said the transfer of the majority of the LSC’s staff to the new agencies had been a “great achievement”. However, he warned job cuts could be made over the next 12 months.

He said: “We expected possibly a public cost of redundancy, but we’ve not ended up with a public cost and we will manage the efficiencies that will be required by us administratively over the next 12 months. We may not have achieved efficiencies in the transition, but we will unquestionably achieve them in the next 12 months.”

A spokesman for the Department for Business, Innovation and Skills insisted the new skills agencies were fit for purpose. He said: “The SFA will be a completely different type of organisation to the LSC, with a different structure. It is important to ensure we do not lose the strong knowledge and experience that has already been built up by existing members of staff in this area.”

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