View of part of the Fujairah Corniche and the Hajar Mountains in the Background

Thursday, June 12, 2008

Dubai Loses Attractiveness for Skilled Workers

A survey conducted by and unveiled on 8 June 2008 at the Dubai Economic Council forum has shown that the Dubai (and UAE) image is becoming tarnished and that it is harder to attract talented skilled workers to its shores. The survey also included observations relating to national workers.

The equation looks like this:

+High cost of living
+High inflation
+High rents
+Falling dollar peg
+Lifestyle harder
+Traffic congestion
+Parking woes
+Growing wage discrepancies between public (higher) and private sectors
And still to come…
+Higher visa costs

=Private sector claims it cannot raise salaries
=Private sector cannot attract Emiratis
=Emiratis paid more in public sector (this is not linked to productivity)
=Harder to recruit
=Good workers leaving
=High turnover of staff especially among nationals

There are a growing number of concerns highlighted by the Skilled Workers survey which, if not addressed swiftly, will lead to a severe bleeding of the talented workers that the UAE has attracted and major long-term difficulties in convincing prospective international workers that life in the Emirates is worth making the transition.

Paying Emiratis more than people of other races is a retrograde step. It affects staff morale when salaries are not tagged to credentials and performance. It discriminates, it flies in the face of modern international labor legislation and it is not an act of justice ‘adl (عدل).

On the surface it may appear desirable for the recipients but this practice is not good for the workers concerned as it removes any incentive to strive and develop when salary increases are awarded simply for being a member of the right race. This practice of unintentionally doing harm by being kind is well illustrated by the Emperor Moth syndrome.

Dr. Geoff Pound

Image: Traffic congestion

For more on the different salary rates according to ethnic origins refer to the book by Essam Al Tamimi, Setting up [Business] in Dubai. This is reviewed at Reviewing Books and Movies.

On the Negative Side
VAT and Visas Discouraging Tourists
High Costs Driving Expats Away

On the Positive Side
New Zealanders Attracted to UAE
Australia’s Love Affair with Dubai and UAE