In order to combat the increasing global competition for skilled employees, a growing number of firms in the UAE are attempting to brand themselves as excellent places to work.
By Scott Shuey, Chief Business ReporterPublished: August 09, 2008, 00:01
Dubai: In order to combat the increasing global competition for skilled employees, a growing number of firms in the UAE are attempting to brand themselves as excellent places to work.
Varina Nissen, the managing director for Manpower Middle East, a recruitment agency, says many companies are trying to build their brand image by offering a supportive international culture, the chance for accelerated promotion, training, and increased benefits, such as flexible working hours.
"These do play very well to the professional who comes to the region, and is looking for an accelerated career," she says.
The need to be competitive is a result of increasing demand for skilled employees from other emerging markets and the rising inflation rate in the UAE.
"It's getting very challenging, and we're all fighting for the same pool of candidates," says Acer's J Trivikram, Dubai-based human resources manager. His company has introduced a number of initiatives for employees, including staff transportation, which has been extremely popular, he says.
But the main issue these days is rising rents, and Gus Takkale, a human resource manager for SAP, one of the world's largest software companies, says Dubai's high rents are one of the major concerns for potential employees.
"The first thing they're doing is looking at property prices, the cost of education, and then their earnings," he says.
Takkala adds that SAP has always promoted itself as a good place to work, and the company is allowing its employees here to have "flex time", which means they can set their own hours. Acer also offers that option, Trivikram says.
While the concept of flex time isn't new, it is a relatively new benefit for the region, and not everyone is willing to accept it yet.
"It's makes perfect rational sense, but they haven't managed to shift the mindset of regional managers," Nissen says.
Managers are hesitant to change because they're concerned about employee productivity, and some employees prefer to stick to regular working hours too, which allows them to network with their colleagues. That's very important considering the region's relationship-based type of management, according to Nissen.
But offering benefits instead of compensation isn't always the best way to retain employees, according to Peter Felix, the president of AESC, an executive recruitment firm based in New York.
"Compensation has always been an emotional issue. Benefits are not," he says. Although he recognised flex time as "quite important", he points out that if employees don't need flex time, they're not going to care whether it's offered or not. Instead, he says employees want to see companies increasing the compensation for travel, school and accommodation.
But increasing compensation is, obviously, expensive, and many companies claims their bottomlines are already hurting due to increased salaries.
However, Nissen says there is no good data available showing how much payrolls have risen. Even if there was, such information would become obsolete in about six months. However, she estimates that salaries have increased between 7 and 25 per cent over the last year. Felix estimates the increase to be between 15 to 30 per cent.
International companies may be able to afford that, but it's overstretching the budgets of smaller companies, Nissen says.
But as payrolls are increasing, the region is also suffering from increasing competition from the Bric countries, Brazil, Russia, India and China. Those countries have seen their economies boom over the last couple of years, and a large number of expats are returning home, taking their skills with them.
"The typical... international expat who parachuted in on a three- to five-year package is going away because of explosive demand," Felix says.
In response, a lot of companies, including Acer and SAP, are looking to hire people who are already based locally. That comes with two immediate benefits: quicker visa processing and closer culturally affinity. However, there is still a shortage in the financial and insurance industry, Nissen says, which is not being filled locally.
There is a silver-lining though. Because of the competition, human resources departments are becoming very knowledgeable about attracting new hires, she says.
"They have to be nimble. They get very quick feedback on what worked and what didn't," she says. "This region is going to be the one which figures out how to manage flexible work hours and a multinational workforce."