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Expats leaving the Gulf after honeymoon period

26 August 2008

Paul Clarke

The GCC might be seeing a raft of applications and relocations of Western expat bankers, but many who make the move are realising that the region doesn’t quite live up to the level of pay, benefits and career progression they enjoyed back home. This means firms are struggling to hold on to the best talent.

“There are a lot of people reaching out from around the world,” says Varina Nissen, managing director of Manpower Middle East. “They’re not finding that the composition of remuneration and benefits completely matches what they leave behind.”

The recruitment firm says that the number of applications they have received from UK bankers has increased by 250% in the last six months and by 100% in the last two weeks alone.

But it has also seen a surge in the number of Western candidates in the region who want to change jobs, because they believe promotion and other long-term incentive plans are not based on fairness and merit.

According to our research, regional banks in the GCC have massively increased their wage bill in the last year in order to compete with the influx of Western institutions. What’s more, a study by Hewitt Associates shows that on average salaries now make up 60% of banks’ operating costs.

However, benefits are only slowly moving towards the Western mould, according to research by Mercer Middle East.

Paul O’Malley, worldwide partner and total compensation and rewards specialist at Mercer, says the traditional end-of-service indemnity payment usually awarded to expats on retirement is now shifting to final salary basis.

This is on top of the likes of flight allowance, housing subsidy and school fees, which have become a standard part of bankers' compensation packages.

What’s more, Nissen says that organisations are beginning to realise the importance of transparency in the career development process.

Still, if expats were likely to jump ship after a short time in the job, they’d be following the example of many of their peers. Leading industry figures speaking at a recent conference said that the average tenure for a banker in Dubai is just seven months.

Comments (6)

  • I agree on the comment made by writter. Avg. tenure is just a 7 months. There is a clear games employer team plays with newly hired employees. After three month of probation period on last day probation has been increased to another three month as labour laws does not allow period higher then six month. Bank's create atmospere during 3-6 month so that person needs to resign. Please advice how many of you heard this or experience this.

    mohit_mehta1 30 Aug 2008

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  • I have not heard anything which mohit says. It may be true but not in all cases. Such tactics are employed generally for non skilled or semi skilled category where the employer can not ascertain the suitability through pre-selection process. However, the main question lies that the GCC banks, mainly regional bank, do not have transparent policy of employment. The environment is changing fast and employment practices need to be improved substantially by the banks in GCC. Only increasing the wage bill would not help nurture the talent on continuous basis which is important for long term growth and stability.

    gopal usain 01 Sep 2008

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  • Dubai and gulf needs more professionalism to compare with london and new york

    dubai 02 Sep 2008

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  • i do agree that many bankers moving to the UAE are lured by the promise of a tax free package but when they arrive here, they realise that on a net basis they are actually worse off than if they stayed home. I am suprised that some expats still receive housing subsidy plus education grant - for those of us who came here, these benefits were never on the plate for offer. i take it as a personal duty to inform anyone coming the to the UAE of the hidden costs and how employers never tell the whole truth - the focus is only the tax free salary, which looks good when you are in another country. UAE is a great place to work (i think, in my view) but the the laws should require that the employers reveal true cost of living to any employees coming on board. Employers will not necessarily make life difficult for you  to leave, but they play the part of not partial disclosure so when you come on board the first six months feel like a living financial nightmare! And again, i belieive that the only reason people are staying on the job is to finish the one year required by law and, it doesnt look good when one's CV shows that you were in a job less than one year. Watch the mkt over next 1 yr!

    Min T 06 Sep 2008

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  • From the above comments, it made us cautious about the cost of living in GCC. Simultaneously, it is  also true GCC employees get paid in higher scale. Only thing is those who are aspirant of GCC should consider  all the cost mentioned above.

    Thanks

    Chiranjib 09 Sep 2008

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  • I've seen expats from UK and US struggling with the overtly political culture in the middle east where your promotion and job security is not on merit but on your upward management skills. For the fast moving upwardly mobile executive, these skills are essential but for the steady workers, managing internal cross cultural relationships can prove to be draining. Beware of the culture of the company you are joining.

    aqueelam 11 Sep 2008

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