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Dubai: While new jobs may still be hard to come by for many people, conditions are looking positive for businesses in the UAE, thanks to a high supply of candidates in the market.
A new report by Hays and Oxford Economics that was released on Tuesday suggested that the size of available talent in the UAE is growing, as the country's income tax-free regime continues to attract expatriates, which currently make up more than 90 per cent of the population, and companies remain cautious about hiring new staff.
More residents from the younger generation are likewise entering the working-age group, further widening the labour supply. While these may all suggest that professionals looking for jobs are faced by a prospect of higher competition, the current trends are in favour of the companies.
“Employers in the UAE are experiencing a growing working age population and high rate of immigration, both of which increase the country’s skilled labour supply,” the report said.
Due to a lack of availability on employment and vacancies data, the report was not able to establish a talent mismatch, but analysts said conditions on the labour front are still "challenging."
“Market conditions in the UAE remain challenging, with employers taking a cautious approach to hiring additional headcount,” noted Chris Greaves, managing director at Hays Gulf Region.
“This, combined with the continued high level of immigration of labour in response to tax-free salaries, as well as cost-cutting activity [redundancies], has seen an increase in the number of available candidates in the market.”
The Hays Global Skills Index, an annual study on trends impacting skilled labour markets around the world, showed that the overall score for the UAE has decreased from 4.8 in 2016 to 4.7 this year, suggesting easing pressures overall, helped by a strong and ever increasing supply of talent in the market.
“Reasons for this can be explained by overall net [expat] migration, with the UAE having one of the highest rates in the world; and the growing working age population, counterbalancing the issue that many other countries face of an ageing population,” the report noted.
Companies are also facing easing wage pressures, with Oxford Economics forecasting real wage growth to be at 2.9 per cent for year-end 2017, down from 3.6 per cent in 2016.
“[This] is further good news for organisations based in the UAE,” said the report. “What’s more, the easing wage pressures in the Middle East means employers may find it slightly easier to attract and retain top talent relative to last year.”
Greaves, however, warned that companies must not become complacent, citing that employee turnover rates in the UAE remain high.
"An organisation is only as good as the people in it. While demand for roles remains strong from skilled candidates and salary increases slightly subdued year-on-year, high employee turnover does remain a challenge for employers," he said.