Fat pay not enough to keep staff

UAE firms are told the key to retaining talent is to work on networking opportunities, training and benefits.

The Dubai International Financial Centre, if firms here want to retain staff they need to think of more than hefty pay packets.

DUBAI // Offering bigger pay cheques is a short-term approach to the wider problem of attracting and keeping talent in the workforce, participants at a human resources conference were told yesterday. The UAE's job market had a high turnover rate - some 45 per cent of employees in the private sector had been with their firm for less than five years, said Dr Samer Kherfi, an assistant professor of economics at the American University of Sharjah.

But the problem is not unique to the UAE. Due to high GDP growth rates and the large-scale investments across the GCC, higher wages alone are not enough to keep skilled workers on staff. "People who were hired in the last few years are earning more than the starting wages of those who have been in the same positions for a higher period of time, due to the skills shortage," said Dr Kherfi. "But even offering higher salaries to retain workers may not work if everybody is doing it. There'll still be high turnover."

The Dubai Economic Council, which hosted the one-day conference at Raffles Hotel, commissioned a report by the Dubai-based market research firm, YouGovSiraj, to examine the "reality of HR in Dubai". The firms surveyed said that on average they had recruited 21 per cent of their workforce last year - but watched 11.6 per cent resign. Dr Mouawiya al Awad, an economic adviser at the Dubai Economic Forum who presented the findings, said that although turnover rates might be high, vacancies were being filled.

"There's a problem of shortages in some sectors, especially IT and engineering," he said. "It's not a general problem." Some 66 per cent of respondents said that Dubai was becoming a less attractive human resources environment due to high inflation, the difficulty of finding the right people for the right jobs and rising pay scales. The survey is limited in its broader applicability because of its small sample size - 398 people - and the fact that 69 per cent of respondents were Asian, mostly middle or junior managers who were making Dh5,000 to Dh20,00 per month. But participants at the conference said it still hit on some key HR concerns.

"Companies have to work on retention, they have to work on employee value propositions, that means salaries, providing employees with networking opportunities, training and benefits," said Mahmoud Hatami, the operations manager at GulfTalent an online recruiting firm. Nasser al Awadhi, the director of human capital at Tecom Investments, said that companies had to differentiate themselves from their competitors in a bid to lure the best in the business.

"In the past we were able to pay less for more," he said. "Now, we have to pay more for less skills. We do not look realistically at the available resources in the market, so we end up placing people in positions they may not be ready for." Rabea Ataya, the chief executive of the online recruiting firm Bayt.com, disagreed with the notion that there was a skills shortage. His Dubai-based company has more than 2.1 million professional job seekers on its books and more than 26,000 companies paying to tap into that reserve of human capital.

"There's a huge amount of talent coming into this marketplace," he said, adding the problem was that companies were not paying "the right kind of salaries". "I still have a lot of requests for secretaries with salaries of Dh2,000 a month or managers for Dh15,000. Maybe we are looking at the problem from the wrong side of the coin." Dr John McHale, an associate professor of economics at the Queen's School of Business in Canada, said that factors other than wage issues were also at play in the UAE. The lack of a "truly permanent pool of talent", due to government regulations that placed limits on how long foreign residents could stay, limited the ability of companies to attract and retain talent.

"There should be routes that allow people to come long term and have the flexibility to change jobs once they're here," he said. "If you did that, you'd have the means of attracting people without having to offer higher salaries. People often come to a place and want to stay for a while. They want to have a long-term outlook." [e-mail]