The UAE’s economy may be heading for recovery, but redundancies are still likely to affect some employees this year.
Experts say that organisations in the country are looking to reposition their strategies and optimize their structures, while others are still trying to keep their businesses afloat. All these will result in unemployment, although not in the same level as during the global recession.
“We expect to see redundancies this year in the UAE. However, these will be at lower levels than in previous years,” says Roman Weidlich, director at Towers Watson Middle East.
“The economic slowdown has put most firms under considerable pressure and not all of them will benefit from the expected return to growth. The most agile organisations are coming out of the slowdown stronger while others will continue to struggle,” he adds.
Besides, a number of “successful companies” are poised to revisit their strategies to secure profitable growth. “This will result in a strong focus on internal efficiencies and process improvement, delayering and redundancies.”
Weidlich recalls that before the economic slowdown, the workforce in the UAE used to be very transient, whereby changing employers regularly in pursuit of higher salaries was the norm. That led to salary inflation and internal pay inequities.
“Many organisations in both government and private sectors are looking to optimise their organization structures and hence their workforces, as they plan for the next phase of growth. Majority of the firms will take advantage of natural wastage – retirements and end of contracts – but will not necessarily recruit for these positions. Rather, they will look to re-deploy or upskill existing staff to improve productivity and efficiency,” he says.
While redundancies are one of the most unfortunate things that can happen to anyone, they have in one way or another “helped cool down a heated labour market in many professions.” In fact, Weidlich says, “more conservative pay levels will benefit the business and their employees in the long run.”