UAE firms boost hiring of Asian expats to manage costs

Posted on March 05, 2019

  • UAE jobs are set to grow by 9% in 2019, led by healthcare and tech sectors

  • Employers are hiring more Asian expats due to their lower salary expectations

UAE employers are planning a net expansion in headcount during 2019, with an increasing share of the new jobs being filled by Asian professionals, according to the results of a study conducted by online recruitment firm, GulfTalent.

The study was based on a survey of 300 UAE hiring managers, as well as analysis of talent searches conducted by over 1,000 UAE-based employers on GulfTalent’s database of professionals.

GulfTalent’s study projects a net 9% growth in UAE employment during 2019. This is based on the finding that 36% of all surveyed companies plan to increase headcount this year, against 27% who expect to reduce staff and 37% who foresee no change.

Shifting Demographics

The study found that an increasing share of the new vacancies are being filled by candidates of Asian nationality, with employers citing the lower salary expectations of these candidates as the primary reason. Over the past year, Asian nationals saw a 12% increase in their share of approaches by UAE employers hiring on GulfTalent, while Arab and Western expats saw declines of 8% and 10% respectively.

Confirming this trend, one UAE-based HR Manager interviewed by GulfTalent said “Our hiring preference has been towards Asian expats, as it gives us a balance between the right skill set and a salary expectation that fits our budget.”

Based on GulfTalent’s data, among expatriate professionals working in the UAE and holding the same job title, salaries paid to Asian nationals are on average 20% lower than Arab nationals and 40% lower than Western nationals. The gaps in expatriate salary expectations are influenced by the prevailing salaries in the candidates’ home countries.

Among nationalities commanding a significant share of the UAE hiring activity, Indian and Pakistani professionals have seen the biggest surge in interest from employers over the past year, followed by those from the Philippines and Sri Lanka.

At the same time, American, Canadian and Australian nationals all saw declines in hiring by UAE employers. Approaches to British nationals also declined but to a lesser extent, possibly due to the continued low value of the British currency following the Brexit referendum, making salary expectations of British expats more affordable for UAE employers.

In their effort to reduce costs, employers surveyed also reported reaching out to less experienced candidates. This is consistent with interactions observed on GulfTalent’s website, where candidates below the age of 35 have seen a 6% increase in approaches by employers over the past 12 months, while those aged 35 or more have seen a decline of 5% over the same period.

Sector Trends

GulfTalent’s survey found the fastest growing sectors to be IT and Healthcare, both witnessing a 30% year-on-year growth in the volume of hiring.

Healthcare’s growth is driven by legislation mandating provision of health insurance by employers. This has resulted in a much higher share of the UAE population utilizing healthcare services, increasing demand for doctors, nurses as well as support staff.

IT hiring is driven by increased digitization of services and the continuing expansion of the country’s startup ecosystem. Over 100 UAE-based startups received venture funding during 2018, totaling $625 million, according to Magnitt, specialists in venture capital data. Much of the funding is going into product development, with software developers dominating tech hiring. Cybersecurity is also contributing to IT hiring growth, especially in larger corporates and financial institutions.

According to GulfTalent’s findings, the construction sector remains under pressure, with overall hiring limited and some companies downsizing. While there is a healthy supply of projects, many driven by the upcoming Dubai Expo 2020, firms typically struggle to collect payments from clients.

Retail is another sector that is facing challenging conditions, due to lower consumer spending resulting from market conditions as well as the jump in prices following the introduction of VAT last year.

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Comments (2)

Erwin
Warehouse supervisor | Landmark Group | UAE

Its good to hear such news for which the Asian expats was given such privilege to be part of the growth of the region. Hearing that would inspired lot of Asian expats to work in UAE.

Posted on 05 Mar 2019

LaMar Alexander Seward
Project Manager | Canada

As noted in the survey above I have also observed a shift in hiring shifting to the Eastern Countries.

I do recall similar shifts in hiring locations in previous economic down turns.

I believe that one of the issues is that while looking for economically competitive employees you hire train and promote people from specific regions and once the general quality of the employees improves there is naturally an interest on the part of the employee for increased salary and conditions. This is quite understandable. But the retraining curve is always there and the pressure on safety, quality, and contractual issues, MOC, delivering the correct project at the correct price on time safely is always a challenge.

This can result in considerable rate of burnout and attrition in the senior and upper level management. This is specially important as there is also a tendency to cut senior staff to reduce costs, and promote more lowly paid up and coming juniors who may or may not be ready. In turn stressing already stressed industries.

I have lived this situation approximately 7 times in the last 40 years. The more things change the more they remain the same.

Posted on 06 Mar 2019

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