UAE companies turn to freelancers to keep costs in check

UAE firms are increasingly using freelancers to balance hiring costs, however, according to experts, the uptick is not just a strategy to weather tough financial times but part of a shift in how businesses are run.

Loulou Khazen Baz, the founder and chief executive of Nabbesh, a portal that connects freelancers with employers, has seen a big increase in the number of freelancers being hired by UAE companies. ChrShow more

When Will Hutson wants a job done quickly, he does not always turn to his team of in house staff.

Instead the chief executive of LMTD, a digital and social media agency, enlists the help of a freelancer. And over the past year he has relied on freelancers more than anticipated.

“Employment costs have continued to rise across the board 5-10 per cent year-on-year for the last three years, while our ongoing demand fluctuates with the market,” says Mr Hutson. “The most consistent answer for this gap has been to look at freelancing.

“Instead of replacing a permanent employee when they’ve left, it’s made sense for us to use a freelancer for certain projects. Areas such as technical design and creating Arabic content particularly lend themselves to freelance work and the current availability of freelancers in the market has made it even more prudent to hire them instead of a full-time member of staff.”

With an ever more uncertain economic situation, many employers are turning to flexible labour markets to fill roles rather than face the cost of full-time employees.

Loulou Khazen Baz, the founder and chief executive of Nabbesh, a portal that connects freelancers with employers, says there has been a 40 per cent increase in the number of freelancers being hired by UAE companies in the first quarter of this year versus the fourth quarter of last year. The home-grown company, which launched in Dubai in April 2012, has also reported a recent rise in its database of registered freelancers to over 90,000 in the Middle East and North Africa region.

Ms Baz says the current economic situation is “almost certainly a contributing factor” to the increase in demand as hiring freelancers as needed is a great way to propel a business forward while saving costs.

“A lot of large and medium-size companies are currently experiencing hiring freezes but they still need to get the work done,” says Ms Baz.

“A way round this problem is by hiring freelancers as they usually come out of a different budget to normal staffing costs. The caveat is, employers should not confuse freelancers with ‘free work’ and need to be realistic when setting budgets to hire freelancers.”

Ms Baz says the demand is highest in the creative and technology services.

“We’ve seen an uptake in small businesses trying to build mobile apps or company websites in an attempt to go digital. Our prediction is for a greater demand on Arabic-related services like Arabic content writing and translation,” she adds.

Nick Rego, the editor-in-chief of AskMen Middle East, a lifestyle website aimed at men, uses freelancer writers to offer a more varied tone to the site because it’s “more cost-effective” than budgeting for a full-time employee.

“If the economy was less uncertain we would definitely look at hiring a full-time writer,” he adds.

“At present, it makes sense for use to use freelancers, not only due to the larger pool of expertise they provide but also because they come without the associated costs such as health care, gratuity and holiday pay.”

But outsourcing is not just a strategy companies use to weather the storm when things get tough financially.

For many, it’s increasingly considered the most cost-effective way to run a business as companies no longer need to own resources outright as they once did, even those involving human capital.

Sam Achampong, general manager at The Chartered Institute of Procurement & Supply (CIPS) Mena says some of the world’s most successful firms no longer see the need to acquire any assets at all.

“Airbnb is fast becoming the world’s favourite accommodation booking website and yet it owns no hotels,” he says. “Uber is taking over as the taxi company of choice and yet they own no cars.”

The rise in demand for freelancers has also been noticed by one of the world’s largest online recruitment platforms, LinkedIn.

Ali Matar, head of LinkedIn Talent Solutions for Southern Europe and Mena, says one of the major trends the company foresees for this year globally is that the freelance economy will continue to grow.

“And I think that is reflected in the UAE,” he adds.

“The arts and design industry, for example, has a sizeable lead as the top freelancing industry on LinkedIn right now. Other top industries range from media and communications to engineering and software development.”

Hala Bassar, 26, from Syria has been freelancing as an Arabic copywriter for two years and has noticed a steady increase in requests for her services since the beginning of 2015.

“A recent job for a non-profit organisation was to replace the permanent employee. They liked her and her work but couldn’t afford her salary so had to let her go,” she explains.

Mr Achampong says we are witnessing a trend in the rise of non-permanent employees in all sectors of industry.

“The main driver to this is of course costs saving. An employer doesn’t need to worry about gratuities, medical insurance, visa costs or any other attendant expenses associated with hiring a full-time employee. While we previously saw very little temporary labour in the region, we are now aware that this is becoming increasingly popular.”

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