Any sustained upheavals "could increase the supply of Arab professionals from regional hotspots who will seek careers in the Gulf, putting downward pressure on salaries," the study released on Monday said, citing the experience of the 2006 conflict in Lebanon, which resulted in a mass migration of Lebanese professionals to the Gulf. GulfTalent.com is an online recruitment firm in the Middle East.
The report adds that "the resulting coverage of the region in international media may deter some Western professionals from relocating to the Gulf," similar to the trend seen in 2003 in the immediate aftermath of the Iraq war.
The study, which was based on a survey of 32,000 professionals and 1,400 companies across the six Gulf states, reveals that private sector salaries in the UAE are forecast to increase at an average rate of 6.3 percent this year.
Among the Gulf countries, Saudi Arabia and Qatar had the highest pay rises in 2010 at 6.8 percent and 6.7 percent, respectively. Oman was in third place with 6.4 percent, followed by Kuwait at 5.7 percent. The UAE and Bahrain saw the smallest increases at 5.2 percent and 4.9 percent, respectively.
Although much lower than the double-digit increases of 2008, the pay rises were all higher than the rates of inflation, resulting in improving living standards for many. However, an estimated 55 percent of professionals did not receive any pay increase at all.
Across the region, however, with consumer spending picking up, the retail sector saw the highest pay rise at 6.4 percent, while education had the smallest increase at 3.8 percent.
Among job categories, Human Resource professionals saw the highest raise at 7.1 percent. Many executives told GulfTalent.com that, with their companies increasingly focused on performance, the HR function had assumed a much greater significance. Lawyers had the smallest increases at 4.3 percent.
According to the study, pay increases were largely driven by the employers' efforts to retain their top performers, growing demand for skill in Saudi Arabia and Qatar, as well as continued growth in Asia, the main source of talent for the Gulf.
With increasingly attractive career opportunities in their home countries, Asian professionals working in the Gulf received pay rises of 6.1 percent compared with just 3.2 percent for Western professionals.
Salaries in the booming Indian economy grew at 11.1 percent in 2010, compared with just 2.4 percent in the UK, where unemployment remains high following the financial crisis.
Based on the report findings, the Gulf's labor market is witnessing "a small but fast-rising Chinese presence."
As employers seek substitutes for India and the Philippines, their traditional sources of skill, while a growing number of Chinese companies win major construction and energy contracts in the region, often bringing the required staff directly from China. Construction of a high-speed railway connecting Makkah and Madinah, and a new port in Doha are among contracts recently awarded to Chinese firms.
Based on GulfTalent.com's study, the employment market in the Gulf is expected to continue growing at a moderate pace, aided by global economic recovery, rising oil prices and continued government spending on infrastructure projects. 61 percent of companies surveyed expected to increase headcount in 2011, compared to nine percent who planned staff cuts.
GulfTalent.com's study highlights the rising prominence of Qatar as a destination for professionals. The trend has been driven by fast-rising salaries, falling cost of living, growing employment opportunities and an improving international brand, which came to a grand finale with the country's surprise qualification to host the 2022 Football World Cup.
Based on an analysis of vacancies advertised by employers and recruitment agencies on GulfTalent.com website, job opportunities in Qatar have grown from eight percent of all GCC vacancies in 2008 to 16 percent in 2010.
GulfTalent.com's survey of mobility intentions found that, while the UAE remains the most attractive destination for professionals, favored by 49 percent of GCC-based expatriates, Qatar is closing in fast, with a 44 percent following. Based on current trends, Qatar could become the Gulf's most popular destination for expatriates.
Meanwhile, employers across the region continued to tap into the talent pool in Dubai, the study said. In addition to professionals who had relocated from Dubai since the onset of the crisis, an estimated five percent of Dubai's residents now commute daily to their jobs in Abu Dhabi, a five-fold increase since 2008.
A similar trend was found in Bahrain, where two percent of residents cross the border each day to Saudi Arabia's Eastern Province, the home to the country's oil and petrochemical industries, up from one percent in 2008.
Despite outflows resulting from job cuts, the UAE remained far ahead of all other Gulf countries in terms of popularity with its current residents, thanks to its superior infrastructure. 72 percent of UAE residents prefer to remain there, compared to 59 percent in Kuwait and 50 percent in Qatar.
Events in North Africa have also drawn attention to spiraling food prices and the challenges of youth unemployment. According to the study, employers in the Gulf are likely to face tougher workforce nationalization targets in 2011, as governments accelerate existing efforts to create jobs for their nationals, particularly in Bahrain and Oman, which according to UNDP statistics, have the highest rates of unemployment in the GCC.
GulfTalent.com's study was based on a survey of 32,000 professionals and 1,400 companies in the six countries of the Gulf Cooperation Council (GCC), as well as interviews with regional business leaders and human resource managers. The survey was conducted during December 2010 and January 2011. The full publication entitled "Employment and Salary Trends in the Gulf 2010-2011" is available for download free of charge from the company's website at: www.gulftalent.com.
