Archive for March, 2009

Education Most Prospering Industry in Crunch

The Gems group being highly connected to Rulers’ of UAE. Consder themselves Untouchables & above the law & policies of Govt.

Being leaders in Eduction-Business industry in UAE, Gems group is minting money by using diversified front companies.

recently at a meeting held by group of Parents of Our Own English High School it was revealed that the bus company which has the transportation contract is also under ownership of Directors of Gems group. The bus fee hike has multiplied several folds in past 24 months without any rhyme & reason. Parents are forced to comply or else take a TC. Who the people shall turn to, when the owners are connected to the TOP rulers of UAE.

In this crunch time after the collapse of almost 90% of UAE businesses the only booming business (for a while) is education. As soon as session ends, come Vacations, suffering parents will move OUT & send families back to home countries.

But who will put a tab on Gems Group… it is a million dollar question.

who will protect the parents and implement law & put a check on the schools & its transportation systems / contracts.

Dubai Hype – Good or Bad

Don’t believe the Dubai hype; good or bad
Media follows fashion dictates. For many years, glossy magazine stories about the high life in Dubai were the only journalistic diet one could get. Now the tide has changed, and the flavour of the month is doom and gloom stories about Dubai the ghost town, where traffic suddenly moves freely and people leave unpaid-for cars at the airport with maxed-out credit cards in the glove compartment.

There is some justification for this: A recent HSBC report sees average price declines in real estate of 23% in Q4 2008. It is in line with anecdotal evidence and is more credible than another report by Colliers International, a real estate company, that speaks of 8% price declines over the same period. Even rents have started to come down after having been a major contributor to inflation over recent years.

Sales of so-called ‘off plan’ properties, that only required a down payment and were flipped many times before a single brick was laid, have come to a virtual standstill, as buyers recognise that leverage works on the upside, but it works on the downside as well. If many people cannot pay follow-up installments, they are forced to sell in a now illiquid market, or the developer gets back a foreclosed off-plan property without the possibility of reselling it to raise the remaining finances for completion of the project. Dubai Freehold

Uncertainty????

Dubai employers make cuts as downturn deepens
An increasing number of companies in Dubai are announcing layoffs and adjusting their hiring and pay practices as the impact of financial crisis grows in the emirate.

Dubai’s booming economy has, in recent years, created millions of jobs and led to a hiring frenzy in which many employers were struggling to find talent.

In the first quarter of 2008, 306,000 work permits were issued to foreigners.

However, the story began to change in October, when Damac Properties cut 200 jobs, or 2.5% of its workforce.

Other companies quickly followed suit, including Nakheel, which sacked 500 employees, and Shuaa Capital, which cut 21 jobs, or 9% of its manpower.

‘The effects of the global financial crisis were delayed in reaching Dubai but there is no denying they are being felt today,’ says Rabea Ataya, CEO, Bayt.com, the largest job site in the Middle East.

‘The dramatic surge in recruitment activity seen early in 2008 as new sectors, particularly financial services and real estate, competed for top talent to fuel their growth, has abated significantly.’

‘Isolated problem’
Markus Wiesner, Managing director of Mercer Middle East, agrees that the financial crisis has hit certain sectors very hard, but says the problem has been relatively isolated and overall most companies are handling it by recruiting fewer employees or being more conservative on salary increases.

‘In Dubai, we are seeing a moderate slowdown in the growth curve rather than a complete stop or recession as in other countries. We are starting from a very high and aggressive growth level, so while yes, there has been a slowdown, this economy is not in a recession but has settled into a more moderate, or maybe a better word is more reasonable, growth rate right now.’

As the financial crisis has grown Bayt.com has received a dramatic increase in CVs at all career levels. The company has over two million CVs in its database, the bulk of which come from the GCC, Levant and North Africa.

About 20% are from outside the region, with the most noticeable spikes having been in CVs from the US and UK – particularly in the financial services and real estate sectors and amongst fresh graduates, especially MBAs.

In addition to an increase in quantity, there has been a noticeable increase in the quality of CVs, especially from overseas, as hiring activity in world capitals has shrunk.

Moreover, top talent has become more mobile in their job search and more amenable to considering employment opportunities in the GCC, which was already seeing a significant surge in interest from overseas talent even before the financial crisis, Ataya said.

Not surprisingly job listings have dropped noticeably on Bayt, but a main reason for this, Ataya says, is that employers are increasingly using the site’s search functionality to find talent rather than posting an advertisement for a position, which is a trend the company began to witness even before the financial crisis arose.

Companies prune workforce
With a surplus of talent on the market, many employers are ‘upgrading’ and hiring talent at levels they were previously unable to easily find and/or afford in the local markets, Ataya noted.

Wiesner agrees, saying companies have told him they hired many people over the last couple of years ‘just for the sake of recruiting to fill positions’, but in doing so felt they had to compromise on the quality of people they hired. Now these organisations are looking at the downturn as an opportunity to trim staff that may be underperforming, and keep those people that they want to hold on to in the long run, he said.

Companies will differ in their approach to dealing with the financial crisis. Multinational firms in Dubai are unlikely to change their benefit plans because – even though these packages are adjusted to the local market – the plans are relatively standard across the company’s worldwide locations. Instead, these companies are more likely to cut salaries and bonuses.

‘Local companies, on the other hand, might adjust both pay and benefits, but usually the first to go is bonuses, and then – in this region – they are more likely to freeze, rather than cut back, on salaries,’ Wiesner said.

Wait-and-see approach
Many companies say they are still evaluating the situation.

‘A lot of our clients are taking a wait a see and approach. They tell us they see no immediate need to lay off people or cut salaries, but the situation may look different a year from now. We will see over the next 6-12 months the real effect of the downturn, particularly on Dubai and its economy.’

One fact of life that employees should expect is that salaries will remain relatively flat for the time being. ‘Recently we had high inflation – up to 14% – and pay increases that were close to that figure but not 100% keeping up.

‘So what I expect this year is lower inflation and lower pay increases justified by the global financial situation. Again we will hear similar complaints from employees this year because of the situation in terms of the percentage growth versus inflation is similar to what it was last year,’ Wiesner said.

Another trend that employees are likely to see is more pay packages based on performance. ‘We have quite a lot of organisations coming to us looking at more performance-related payment schemes, but I would not say that this is particularly driven by the current economic situation.

‘This is a general cultural change that has been happening here over the past two to three years, where organisations are looking for payment structures with higher bonuses relative to salaries. I think organizations now have a stronger incentive to go down that route,’ he noted.

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