Nowhere has the effect of the financial crisis been more evident than in the job market, as a number of companies, particularly in the real estate sector, have been forced to make swingeing cuts in order to deal with the fall out from the global financial crisis. Kershaw Leonard has released its annual Cost of Living report, the sixth installment of the paper. After comparing the UAE market in mid-2008 to the California gold rush of the 1800s, the Dubai-based recruitment and HR consultancy has said that the market in 2009 now resembles ‘survival of the fittest’
‘In the UAE, where the economy runs on a predominantly imported workforce, it may take some time, once the market picks up again, to see the effects of redundancies over the last year. This is particularly relevant in the construction industry where…some of the top talent has been more willing to relocate rather than take a reduced salary,’ the report notes.
This is particularly noteworthy as, with employee visas being linked to company sponsorship, a redundant workforce may have no choice other than to leave the country once the ‘waiting period’ expires if no jobs are available.
In addition, the report notes that UAE labour laws do not recognise redundancy provisions, and companies looking to rehire for recently redundant positions may be blocked by the Labour Department.
The UAE is also facing increased competition from other GCC countries, with Qatar likely to be the only state posting double digit GDP increases, IMF estimates put these at 18.5%, and Kuwait and Bahrain loosening rules on labour mobility and No Objection Certificates.
‘As one might expect, there have been few increases across the market over the past year, and a number of significant decreases,’ the report says, noting that in the HR, retail and legal sectors salaries have remained the same. In the finance sector salaries have seen slight upwards movement, which is attributed to the field gaining ever-increasing importance as companies look to tighten cash flow. Accountants and credit controllers in the UAE are on a par with the Eurozone and the US, but up to 50% lower than the equivalent in the UK.
The sectors that have seen the largest drops in salary are real estate, sales and marketing, and media. Western expatriates have seen bigger drops in their salaries than their Arab and Asian counterparts, in the latter two sectors the report notes. In real estate, the drops have averaged 30% across the ethnicity spectrum, and a number of companies have moved away from the high basic model to a more commission-based one.
It is not all bad news, however: ‘Compared to most sectors, engineering seems to have fared well. Some positions open to Asian expats have seen increases of up to 25%, while a western CAD Technician can now command a salary 43% higher than at the peak of the market in 2008.
‘In IT also, while many categories have remained the same, positions such as Business Analysts and Application Developers have seen increases of up to 20%. This may signal a drive within the industry to develop IT initiatives designed to revive client spending from the more recent tendency to make do with existing resources.’
At the top echelons there has been relatively little change from 2008. Arab, Asian and Western CEOs and MDs earn an average of between Dhs88,000 and Dhs138,000 per month, while GMs earn between Dhs44,000 and Dhs69,000. Similarly Arab, Asian and Western CFOs earn an average of between Dhs40,000 and Dhs75,000 – with only Asian CFOs seeing a rise from 2008’s figures of Dhs35,000 to Dhs65,000.
In the media field, there have been signs of the impact of the slowdown. Average salaries for Arab Creative Directors have fallen from between Dhs27,500 and Dhs46,000 in 2008, to Dhs20,500 and Dhs46,000 in 2009. For Asian expats this has gone from between Dhs15,000 and Dhs19,000 to Dhs11,250 and Dhs19,000 in 2009. Western expats have also seen a drop, from between Dhs22,000 and Dhs33,000 in 2008, to Dhs16,500 to Dhs33,000 in 2009.
Arab Account Directors’ salaries have fallen from around Dhs20,000 to Dhs21,5000 per month to Dhs15,000 to Dhs21,500. For the Asian demographic the drop has been from Dhs17,500 to Dhs23,000, to 2009’s Dhs13,000 to Dhs23,000, while for Westerners the drop has been from Dhs20,000 to Dhs25,000, to Dhs15,000 to Dhs25,000.
On the positive side, IT Directors have seen their salaries increase over the past 12 months. Arab and Western executives have seen monthly averages go from Dhs40,000 to Dhs60,000, to Dhs50,000 to Dhs70,000, while Asian directors have seen average increases from Dhs35,000 to Dhs55,000, to Dhs38,000 to Dhs60,000.