Khaleej Times - UAE businesses go on hiring spree as economic activities gain momentum

Majority of the UAE companies are expected to continue hiring spree this year as the economic activities gain momentum in line with the government policy to attract skilled and talented professionals from across the globe, experts say.

About 60 per cent of the businesses expanded their workforces last year and spent 17 per cent more on salaries, according to latest data released by the UAE’s leading employee benefits platform Bayzat.

The research, which covered 127,000 employees in the UAE from over 1,500 organisations, indicates the ratio of employees onboarded to those offboarded through 2022 was highest for technology-related positions at 2.45x. This was closely followed by HR (2.35x), and Marketing (2.02x).

Sales-related roles saw the lowest ratio with the number of professionals onboarded for such positions exceeding the number offboarded by only 1.53x. The research further indicates that a slowdown in hiring rate is expected this year.

Talal Bayaa, CEO and co-founder at Bayzat, said it’s clear that government initiatives such as the introduction of new visa categories, changes to the work week, and sweeping regulatory reforms have set the country up to be a thriving ecosystem for businesses of all sizes.

“Having ramped up their human capital over the course of 2022, UAE organisations now need to set their focus on realising the full potential of this investment,” Bayaa said.

“Equally important, amid growing fears of a recession, the businesses must ensure they are able to retain their top performers and keep operating costs in check. To do so, among other tactics, organisations must leverage technologies that enhance the efficiency and productivity of their employees,” he said.

“Bayzat has itself been a beneficiary of this as just recently, we successfully closed a $25 million funding round which is enabling us to invest aggressively into hiring top talent as we look to expand across the GCC. It’s clear that other organisations in the UAE are also growing their human capital to take advantage of the unique opportunity that this market presents,” he added.

GCC set to be next Europe

Atik Munshi, managing partner at FinExpertiza UAE, said the UAE and the other GCC countries have witnessed a decent growth in businesses during 2022 and which continues this year.

“Hiring at different levels has also seen an upward trend as the business sentiment has improved. Some sectors like real estate, technology, contracting, etc have seen a growth which in turn has increased the hiring,” Munshi told Khaleej Times on Wednesday.

“Our own firm has increased its staff strength by more than 15 per cent. Apart from the increase in head count of the employees the overall cost of salaries and benefits have also been pushed up in view of the increased cost of living fuelled by higher rents, energy prices, etc,” he said.

He said the other factor which has driven the workforce expansion is also the instability in Ukraine and other parts of the world, which has triggered more migration of HNWI’s to the UAE.

“Europe is no longer a very attractive proposition for businesses. I think that this favourable trend for UAE will continue for 2023 as well. The Gulf is expected to be the next Europe in the not so distant future,” Munshi said.

Employee retention

The UAE organisations are also demonstrating their focus on employee retention through their efforts to enhance the experiences of their employees, according to the research.

Insurance and employee benefits, which came into the spotlight in 2020 with the advent of the pandemic, is one such area where companies are doubling down. In 2022, nearly half (47 per cent) of organisations increased the amount spent on insurance premiums per member, with the average increase being an impressive 29 per cent,” Bayzat’s data shows.

Unsurprisingly, with growing ambitions, operating overheads for UAE organisations also increased significantly last year. In the first half of the year, Bayzat saw that fuel reimbursement expenses increased by 38 per cent. This was one of the key factors driving an increase in the overall expense per employee for organisations in the UAE by a modest 13.6 per cent.

Strong job market

Vijay Valecha, chief investment officer at Century Financial, said the UAE job markets are expected to stay strong in 2023, backed by solid regional and domestic confidence and a new influx of expats and foreign direct investment.

Amidst a somewhat choppy global market scenario, the UAE, led by Dubai, is primarily perceived as the safe haven to get away from conflicts in other parts of the world, he said.

“The UAE’s demographic diversification has meant that the newly settled or the would-be expat base has no second thoughts on expanding or setting up their new operations here,” Valecha told Khaleej Times on Wednesday.

He said job growth can also be ascribed to effective and flexible government measures. Significant reforms like golden visas, investor visas, and incentives to set up companies have significantly boosted the nation's overall economic and investment return potential, he said.

Financial, tech sectors lead

While the global economy suffers from significant issues like high inflation, and rising interest rates in UAE, the overall price inflation over here is relatively muted compared to its global peers. Some companies in UAE are also offering hybrid work models wherever possible, he said.

“Most of the UAE tech startups, including in new-age sectors like blockchain and AI, want to expand their workforce. This starkly contrasts with US tech companies that have already cut over 10 per cent of their workforce,” he said, adding that the UAE financial and tech sector will lead the overall hiring scenario.

“Another critical aspect to note here is that most employers would also look at retaining their key skilled base amidst expectations of high labor turnover. Even as the global fears of recession mount, UAE companies are likely to take a more risk-calculated approach and look to hire the best of the worldwide talent,” he said.