With strong economic growth, a booming construction industry and millions of dollars of investment flooding into the technology sector, two thirds of business leaders in the UAE are feeling positive about their growth prospects.
Our latest research shows that the improved economic situation, increased demand for products and services, and expanding business opportunities are driving confidence.
To support growth, many businesses are planning to increase their headcounts over the next 12 months, yet current hiring behaviour is not matching up with that intention – which could be storing up problems for late 2024 and into 2025.
Freeze on hiring
The UAE economy may be going great guns, but global uncertainty is putting a cat among the pigeons.
Many organisations have implemented hiring freezes until they know the outcomes of the UK general election in July and the US presidential election in November, while others are waiting for interest rates to stabilise.
As a global hub, many businesses in the region could be hugely impacted by shifts in the economic and political situations worldwide.
With this, in addition to high inflation globally, many business leaders are opting to play it safe and put off important decisions.
But dallying too long could leave them without the skills they need to achieve their target growth – it is all a balancing act.
Expat influx
Those who are still hiring are benefitting from the huge influx of expat talent flowing into the UAE, and specifically Dubai, over the past 12 months.
Many professionals we are speaking to – particularly those from the UK – are keen to take advantage of everything the UAE has to offer, from the booming economy to the culture and sunshine.
In fact, they are so keen that many are coming to the country without having a job secured in advance.
In theory, this is great news for businesses who are on the lookout for fresh talent. About 71 per cent of hiring managers in the UAE agree that it has become easier to attract workers over the past 12 months.
Companies are receiving more job applications per role than they were 12 months ago, leaving them in a position where they can pick and choose talent because there are more expats available.
The immediate availability of candidates means that businesses can get workers into roles more quickly, and they can also offer lower salaries because the unemployed are willing to take large pay cuts to secure a role and their visa amid fierce competition.
It sounds great on the surface – for businesses, at least – but there is a difference between readily available candidates and technically-skilled talent.
Around half of business leaders agree that while it is easier to find workers, it is not easy to find people with the right skills – and this is particularly true when seeking candidates who are already in the UAE or who have previous local experience.
Those already in the country have benefitted from significant wage growth in the region over the past few years, and as a result many are on higher salaries than hiring managers are expecting to pay. As they already have their visas secured, they are also unwilling to take the same pay cuts as the unemployed expats.
The expectations gap is a challenge for business leaders – who must choose between hiring talent with the skills they need, and hiring cheaper and readily available workers who would probably require development to help them meet objectives.
When businesses opt for the cheaper option, we often see that they end up back where they started when their new hires do not work out – wasting both time and money.
A rush on technical skills?
With many businesses taking a pause on hiring and others likely to come back to the table in search of skilled and experienced workers, it is likely that we will see a rush for the most talented workers later in the year.
At that point, the sudden increase in demand will see businesses competing for talent and having to increase the salaries on offer to secure and retain their first-choice people.
We would strongly urge business leaders to weigh up the importance of the skills they need against the cost and to reconsider hiring freezes if they can, or they could find their growth ambitions impeded by a lack of talent when they need it most.
The UAE economy is going from strength to strength, and it is important that businesses are able to seize emerging opportunities as they arise.
Gareth El Mettouri is director – Middle East at Robert Half
