About 60 per cent of employers in the UAE plan to recruit additional staff in 2021 as an economic recovery and relaxation of Covid-19-related movement restrictions improve the hiring market outlook, according to a new report by recruitment company Hays.
The optimism is also reflected in the upbeat sentiment of the UAE workforce, with 62 per cent of UAE nationals and 56 per cent of expatriate workers feeling positive about their career prospects for the year ahead, said the Hays 2021 Emiratisation Salary & Employment report, which polled more than 100 UAE nationals in the fourth quarter of 2020.
“We have seen job numbers increase since the turn of 2021 and we expect this trend to continue going forward, with an added number of opportunities for UAE nationals in the private sector compared to previous years,” Samantha Wright, senior recruitment consultant with Hays’ Emiratisation division, said.
Border closures and movement restrictions during the Covid-19 pandemic affected the global jobs market in 2020, particularly in sectors such as aviation, events, hospitality and tourism, and caused many redundancies and pay cuts.
The Hays report found that 49 per cent of UAE employers were forced to reduce staffing budgets to remain operational in 2020. However, hiring activity has picked up since the fourth quarter as movement restrictions eased and companies were able to re-establish staffing budgets.
The salary expectations of Emirati and expat professionals are almost similar for 2021, with 55 per cent of UAE nationals expecting their salary to remain the same as it was in 2020 and 52 per cent of expats expecting salaries to remain stable. However, 43 per cent of Emirati workers expect their salary to increase and 2 per cent expect a decrease, while 45 per cent of expat workers expect a pay rise and 3 per cent expect a pay cut.
“We do not expect the pandemic to negatively affect salaries further in 2021,” Ms Wright said. “Instead, we expect the majority of salaries to remain the same in 2021 as in 2020, with increases being paid to those hitting required performance targets.”
Meanwhile, 64 per cent of Emiratis’ salaries remained the same in 2020 compared with 2019, 26 per cent received a pay rise while 10 per cent had their salaries cut, according to the Hays report. In comparison, 46 per cent of expat salaries remained the same last year, 33 per cent got a pay rise and 21 per cent had their salary cut.
The survey also found the number of Emiratis working in the UAE private sector is at a record high. Corporate services firms, banks, consultancies and investment firms within the private sector have increased the number of Emiratis they employ. However, “motivation to hire Emiratis is not purely based on government mandates”, the report said.
Public sector organisations in Abu Dhabi pay the highest salaries to UAE nationals – sometimes 40 per cent higher than private sector organisations, the report found. However, outside the capital, salaries within the public and private sector are shown to be either the same or up to 10 per cent higher in government entities.
Emiratis are now more open to the type of organisations they work for in an effort to be more competitive in the global talent pool, the report added.
“Historically, it was always government entities that provided the highest salaries to Emirati professionals, however, this is becoming less common,” Ms Wright said.
“As such, we have seen Emiratis be more open to working for non-government entities, considering employers based on long-term career development opportunities rather than just the salaries they offer.”
The Hays report also found that 49 per cent of UAE nationals and expat professionals expect to change jobs in 2021.
We do not expect the pandemic to negatively affect salaries further in 2021
Emirati employees cited career development opportunities as the main factor when considering a new employer and said it was the main reason they moved jobs in 2020. Opportunity to progress within an organisation, the ability to see a clear career path to achieve future goals, an organisation's culture and flexible working are other reasons why employees moved jobs in 2020, according to the survey.
The most in-demand professionals in the UAE job market are IT specialists with digital technology and data-driven skill sets, the Hays report said. This is because of the ongoing digitalisation and automation initiatives across all sectors.
For all professions, employers are keen to hire employees with local market experience and who hold a degree and industry certification, the survey revealed.
How the UAE gratuity payment is calculated now
Employees leaving an organisation are entitled to an end-of-service gratuity after completing at least one year of service.
The tenure is calculated on the number of days worked and does not include lengthy leave periods, such as a sabbatical. If you have worked for a company between one and five years, you are paid 21 days of pay based on your final basic salary. After five years, however, you are entitled to 30 days of pay. The total lump sum you receive is based on the duration of your employment.
1. For those who have worked between one and five years, on a basic salary of Dh10,000 (calculation based on 30 days):
a. Dh10,000 ÷ 30 = Dh333.33. Your daily wage is Dh333.33
b. Dh333.33 x 21 = Dh7,000. So 21 days salary equates to Dh7,000 in gratuity entitlement for each year of service. Multiply this figure for every year of service up to five years.
2. For those who have worked more than five years
c. 333.33 x 30 = Dh10,000. So 30 days’ salary is Dh10,000 in gratuity entitlement for each year of service.
Note: The maximum figure cannot exceed two years total salary figure.
How Tesla’s price correction has hit fund managers
Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.
It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.
The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.
Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.
Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.
He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.
AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”
A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.
Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.
Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.
Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.
By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.
Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.
In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”
Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.
She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.
Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.
Ordinary Virtues: Moral Order in a Divided World by Michael Ignatieff
Harvard University Press
Points tally
1. Australia 52; 2. New Zealand 44; 3. South Africa 36; 4. Sri Lanka 35; 5. UAE 27; 6. India 27; 7. England 26; 8. Singapore 8; 9. Malaysia 3
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