Friday, February 06, 2009

53% of Gulf companies put freeze on hiring

I lost more colleagues last week. They received their termination letters on the last day of the week, an hour before the office hour ended. It could be one of their worst day. I was in the similar situation a decade ago, received a call that "You don't have to come to work on Monday! You are fired"

Below from Arabian Business.

JOBS FREEZE: More than half of GCC companies surveyed said they had implemented a freeze on hiring amid the global slowdown.

A survey of GCC companies has revealed that 53 percent had already implemented a freeze on hiring with a further 17 percent planning to do so in the coming months.

The survey on the impact of the global economic slowdown was undertaken by Dubai-based international HR consulting company ORC and around 150 companies responded to the survey from across a wide range of industry sectors with operations throughout the Gulf region.

The survey comes as thousands of employees across the region have fallen victim to the economic slowdown, especially in the real estate and construction industries.

John Macdonald, MD of ORC Worldwide (Middle East) said it was interesting to note the extent of initiatives and corrective measures that companies were taking.

He added: "Obviously staff costs are one of the first things to be targeted in a downturn and, in particular, the 2009 budgets for salary reviews where we found that around 50 percent of respondents reported that their salary review budgets had been adjusted as a direct result of the downturn, many reporting quite significant reductions, typically down from an average of 12 percent to around 5-6 percent, or lower in Oman and Kuwait."

The survey showed that 40 percent of all respondents had already implemented or were in the process of implementing a pay freeze for some or all of their staff while 11 percent had gone a stage further and cut pay rates.

Others had switched the emphasis towards performance-based rewards, modifying bonus targets or targeting specific positions that have attracted pay premiums in the last few years that were no longer considered necessary, Macdonald added.

In terms of employee reductions, the survey showed that only 15 percent of respondents had already implemented lay-offs with a further 20 percent planning to do so in the coming months.

Observing that the UAE was reported as being the most affected country in the GCC, Macdonald added: "While many of the corrective measures are necessarily severe, it is encouraging to see that a large majority of companies are taking positive steps to improve the level of employee communication.

"We also asked companies to tell us their top HR priorities for 2009 and the leading issues were retention of key staff, improving employee performance and productivity, organisational downsizing and reducing the cost of salary and benefits."

ORC Worldwide is an international management-consulting firm headquartered in New York, with a Middle East base in Dubai.

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