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Top 10 GCC job trends and forecasts for 2016

Check Construction Week's list of top 10 employment trends expected in 2016, based on Gulf Talent's data, to find out if your job is safe this year

Riyadh remains the least attractive destination for GCC professionals.
Riyadh remains the least attractive destination for GCC professionals.

GCC economies have struggled since the downward trajectory of global crude prices began in 2014, and private sector employees in the region are now starting to feel the impact of reduced revenues. 

Shrunken state budgets have resulted in fewer contract awards within the construction industry, and various firms have slashed their workforce to manage their expenses. 

In February, OEM giant Caterpillar announced the cutting of about 670 jobs from its workforce as part of the company’s extensive restructuring programme.

Elsewhere, UK-based design, engineering and project management consultancy Atkins confirmed that it has laid off 100 staff across its Middle East property and infrastructure teams.

Both companies said these decisions were driven by the slump in oil prices. 

However, it is altogether likely that recruitment will continue in a region set to host a World Expo and FIFA World Cup tournament in the new future. 

More probable is that new employment trends will emerge in the GCC, with the market expecting a renewed focus on multi-skilled employees and outsourcing. 

Check out Construction Week's round up of the top 10 job trends forecasted for this year, based on the findings of recruitment portal Gulf Talent's Employment and Salary Trends 2016 report

The report surveyed over 25,000 professionals and 700 executives and human resource managers in the GCC, and also includes data from with 60 senior executives.

Please note that this list has not been arranged in order of rank. 

1. Redundancies on the rise

As oil and gas investments are slashed, energy firms in the GCC have been compelled to effect redundancies on "an unprecedented scale", the report stated. 

The situation is exacerbated by a significant drop in government psending, which has pressurised construction and banking firms. 

Administrative staff, the report said, appears to have been most affected, with one of 10 surveyed such professionals losing their jobs in 2015. 

Engineering and general management professionals were also impacted by lay-offs last year. 

The pace of redundancies picked up in the second half of 2015 and looks set to accelerate during 2016, with 10% of employers surveyed planning job cuts.

2. Changing recruitment patterns

"Following robust hiring activity in the first half of 2015, firms across the region have become increasingly cautious in hiring", the report claimed. 

Faced with a cooling business environment, many have limited recruitment to replacement hiring only.

A significant number are undertaking restructuring, merging job roles or outsourcing entire departments to reduce costs and improve efficiency.

With all hiring under scrutiny, there is growing demand for multi-tasking generalist candidates who can undertake a wide range of duties, Gulf Talent's research found.

Employee turnover too has fallen, with fewer opportunities and greater instability making candidates more cautious. 

3. Construction records pay rise

Construction salaries increased by 6.1% in the GCC last year, Gulf Talent's report said. 

This is second behind the retail sector, which recorded pay rises by 6.6%, and one ahead of banking, which increased salaries by 6% last year. 

An atmosphere of competitiveness and the desire to retain specialised staff are being viewed as the key contributing factors behind this trend, the report added. 

Hospitality saw the lowest salary growth at 3.7%, owing in part to the decline in visitor traffic from Russia and European countries as a result of their weaker currencies.

4. UAE most attractive

The UAE continues to dominate as the most attractive destination in the GCC for expatriates.

Up to 63% of the professionals surveyed picked UAE as the place they would be most likely to move to, Gulf Talent's report said. 

The country also enjoys the highest retention rate in the region with 88% of expatriates already residing in the country expressing a desire to remain there.

Saudi Arabia continues to decline as a top destination for expatriates, with its "relentless drive" to meet Saudisation targets in the private sector, the report added. 

5. Nationalisation pressure

An increasing the share of private sector jobs held by nationals continues to be a top priority for GCC governments.

Saudi Arabia and Kuwait recently expanded the range of job categories reserved for their nationals.

Kuwait has also taken measures to make expatriates less employable, by limiting professions in which expatriates can be issued with a driving license.

Meanwhile, the diminishing number of new government jobs may be creating a window of opportunity for the private sector, with some employers reporting greater success in attracting Gulf nationals.

6. Improving worker protection

GCC governments continue to gradually improve worker protections, partly in response to negative coverage in international circles, the report said.

Qatar and Saudi Arabia have followed the UAE in launching a wage protection system to guarantee timely payment of employee salaries.

The UAE recently removed the six-month visa ban on employees who leave their jobs, while Qatar’s proposed revamp of its Kafala system will also make it easier to switch jobs.

7. Pay rises slowing

With the recruiting market cooling and businesses tightening their spending, average pay rises in 2015 slowed down to 5.7%, from 6.7% in the previous year.

Employers also reported an accelerating shift to performance-based variable pay.

Based on Gulf Talent’s survey of employers, salary increases are set to slow down even further in 2016, forecast to average just 5.2%.

8. Qatar tops pay rises

Qatar and Oman had the highest salary increases in 2015, Gulf Talent's report stated.

The surge of economic activity in Qatar due to the 2022 World Cup has contributed to growth in pay, while the increased unionisation of the workforce in Oman continues to put pressure on salaries there.

Bahrain, heavily exposed to the oil price collapse and still recovering from the political unrest of the last few years, witnessed the region’s lowest average pay rise.

9. Rising cost of living

The lower salary increases are in spite of rising cost of living, as GCC states gradually let go of subsidies. 

Except in the UAE, which already had lower subsidies, residents across the Gulf have witnessed a big jump in their fuel bills.

With the knock-on effect of fuel prices on other goods and services, inflation across the region is fast rising, threatening to eat into employees’ already subdued pay rises.

The decline in rents is providing a partial reprieve in some areas.

10. Stagnant disposable incomes

GCC's professionals are likely to face a "double-whammy" of rising living costs in 2016, as a result of cuts in government subsidies, coupled with stagnant wage growth due to the depressed hiring market.

As a result, real salary increases net of inflation are expected to be significantly lower than in previous years.

Bahrain is expected to fare the worst, with average wages rising only at the rate of inflation, leaving many professionals with no increase in their disposable incomes.

 

 

 

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