Dubai: UAE companies may be incurring Dh9.9 billion in additional staff-related costs due to high turnover among workers in the country, a management consultancy firm said on Saturday.
Employee recruitment and retention in the Middle East will continue to pose challenges for both public and private organisations amid the global economic crisis, resulting in additional operating costs, it said.
Quoting an official labour report, it said expatriate workers in the UAE make up more than 90 per cent of the private sector staff, at about 3.1 million employed by 260,000 est-ablishments.
Flagship Consultancy estimated the cost of turnover per worker at Dh15,180 annually. Quoting another survey, conducted by Bayt.com and YouGov Siraj, the consultancy said in a press release the average monthly salary in the UAE is Dh10,120 and the average length of time holding a job in the UAE is 4.7 years.
It put the turnover rate at 21 per cent, or 657,930 workers, representing Dh9.9 billion in costs to businesses every year.
"Mobility of skilled professionals remains a challenge to UAE businesses. This is costing businesses a substantial deal of wasted resources and weakening their competitive positions against those which are having a stable workforce with lesser turnover rates.
"Regional companies are losing significant revenue opportunities because the majority of the departing professionals own unique expertise and knowledge and they are being head-hunted by direct competitors to their incumbent companies," said Zed Ayesh, the company's managing director.
High staff turnover has both monetary and non-monetary consequences and costs. Companies have to bear costs in the separation process like severance package, end-of-service benefits, cost of employment card and visas, absence of staff till replacements are found, loss of productivity and the lost knowledge and training of former employees.
Other costs include recruitment processes like fees of recruitment agencies or cost of advertising for the vacant post, screening and interviewing candidates and cost of administrative process.
"Costs of turnover can easily surpass 150 per cent of the employee compensation figure and would be much higher for managers and high paid executives," Ayesh said.