Businesses operating in the Arabian Gulf have so far shrugged off the impact of lower oil prices on their hiring policies, with 80 per cent of them expected to take on new staff, according to new research released by the End of Service Benefit (EoSB) provider SEI Investments.
Companies in the UAE, meanwhile, are drawing increasing confidence from the prospect of contracts related to Expo 2020 in Dubai, with an increasing proportion of business expecting to reap a positive benefit for their business.
The survey of 110 senior executives – around 85 of whose companies have UAE-based employees – found that 80 per cent of respondents expect to increase their headcount on an annual basis over the next three years, with 29 per cent of respondents predicting a 10 per cent increase over the same period.
Furthermore, 65 per cent of respondents expect salary increases of at least 5 per cent over the same period.
While such percentages have fallen compared with a similar survey last year, such numbers suggest that fears over the impact of falling oil prices on businesses' bottom lines have been exaggerated, according to Samer Abdel Kader, head of Middle East at SEI Investments.
“There’s still quite a bullish sentiment in the region as far as hiring and employment trends are concerned,” he said.
“Certainly [the price of oil] has had an impact, but my view is it’s probably a lot less than many would have expected.”
Sixty three per cent of respondents of the survey – carried out in May and June – claimed they had felt no impact as a result of the change in oil prices.
Just 5 per cent expect to have to conduct major restructuring of their businesses because of falling oil prices, which such companies largely confined to companies operating in energy and related sectors, said Mr Abdel Kader.
UAE respondents showed greater expectations for a positive impact on their business from Dubai's Expo 2020. Fifty four per cent of respondents expected their businesses to benefit from the event, compared with 45 per cent last year.
“Even in the absence of a large number of contracts being awarded, sentiment over the Expo has only gotten stronger over the past year,” said Mr Abdel Kader.
“Last year when the story of the Expo was relatively fresh, so we wanted to see whether sentiment has changed since then. What’s surprising is that sentiment has changed positively.”
Employers also reported lower attrition rates as employees stay longer and accumulate higher EoSB payouts, with 45 per cent of those surveyed having attrition rates below 5 per cent per annum.
The survey also found that 71 per cent of respondents that offer enhanced EoSB plans have an attrition rate of less than 5 per cent versus 41 per cent of respondents that do not.
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