Working in the Middle East, particularly for expats, was always an attractive proposition. The huge tax free salaries, generous benefits and allowances and the relaxed working environment for many perhaps most companies, (of course this cannot be said for every company or every expat), created a euphoric atmosphere, perhaps even an artificial environment. It was a bubble waiting to burst and the recession provided the perfect pin to burst it.
Businesses in the Middle East are like those in any other region, bottom line is important, profits are crucial, good deal making is business sense be it with a supplier or client or employee. Perhaps, moreso in the Middle East, as historically the Arabs were known for their trading and abilities to negotiate on price. This means, usually there is a shock to the system for the less prepared who think doing business or working in the Middle East means quick and easy money, on the contrary, negotiations are hard and tough from major suppliers negotiating multi-million dollar deals with corporations to an employee discussing salary or pay rise. Add to this the fact that pre-recession places like Dubai were booming, they needed to attract skilled expats such as engineers from western countries and lots of them, therefore were prepared to pay whatever it took. In turn such expats were demanding huge amounts in salary packages as many were reluctant to come to the Middle East, thus employers not only paid lucrative salary packages but also looked after their precious assets by giving them a lucrative lifestyle –villas, fast cars, golf memberships, long holidays, multiple annual flights home for the whole family, relaxed working hours and so on. At the time, it was needed, there were huge and ambitious projects with multi billion dollars at stake that needed such skilled people in such numbers, thus one can understand why companies did this – to an extent.
Then, as Warren Buffet says, when the tide goes high and water recedes those swimming naked will be exposed. Many companies were fuelling projects on huge debts and speculation, many expats were paid big and spent big even went into debt, they all got exposed. In fairness so did companies around the world in some cases far more than in the Middle East. The result, apart from the obvious reasons of supply and demand, salary structure and working cultures is being closely examined as not to repeat past mistakes, as well as to create a playing field level with other major regions around the world. Add to this the drive in many Gulf countries to encourage local hires. Many Executives and HR directors I speak to tell me, companies now want the same skilled workforce, on less money, fewer benefits as well as wanting them to work harder than before – especially as many believe some employees were spoilt, and that now, in a recession, employees have fewer choice thus will be open to lower salary and longer working hours, which has also made employers a lot more picky. Some are looking to places like India and Singapore to replace more expensive western expats while others try to find suitable replacements on lower salaries and even combine roles – of course such measure are taken after suitable local talent is not found. This means of course for Headhunters like us its harder work, although, Hunter & Chase, has been working across this region extensively for many years and like any good company had to adapt. Ironically, on the flip side it has meant we are in demand more than ever before, as it becomes harder for companies to attract talented and skilled employees on lower salary packages without the use of skilled headhunters like Hunter & Chase.
I have spent many years travelling to and working around the region, I have seen the highs and the recent lows in the region. I firmly believe the Middle East is a great place to work and do business, i believe it will rise stronger, leaner and smarter than before, and, we at Hunter & Chase look forward to continuing to work with clients and candidates in the Middle East as the future looks brighter.
Authored by Hassan Jalil
– Hassan is Director for the Middle East and Asia at Hunter & Chase Executive Search.
