Redundancies in the GCC region are expected to reduce this year, although Saudi Arabia will continue to witness job cuts, a new survey has found.
The poll by online recruitment firm GulfTalent found that 45 per cent of participating firms in Saudi Arabia expect headcount reductions in 2017, compared with 15 per cent of firms in the UAE.
Region-wide, the number of companies cutting headcount is set to drop from 40 per cent of respondents in 2016 to 23 per cent this year.
More firms also plan to expand their workforce, with their numbers increasing from 41 per cent in the past year to 47 per cent in 2017.
“Saudi Arabia is an exception to the overall positive trend due to its higher dependence on oil revenues,” the report stated.
The kingdom’s economy has been hit hard by the drop in oil prices, with the IMF recently revising its 2017 GDP growth outlook for Saudi from 2 per cent to 0.4 per cent.
However, with the country embarking on its Vision 2030 programme, which seeks to diversify its economy from oil, the situation is anticipated to improve in the future.
Sector-wise, the survey found that manufacturing companies across the GCC reported the most positive outlook, with 58 per cent of firms planning to increase staff numbers in 2017.
The sector has been a major focus of economic diversification efforts by governments over the last couple of years. Some surveyed companies cited streamlined regulations, strong logistics networks and proximity to export markets as factors contributing to their growth.
Healthcare companies, including hospitals, reported the second highest rate of jobs growth, with 55 per cent planning headcount expansion.
“This is also largely on the back of increasing demand from a fast growing population, further fuelled by government investment and regulatory changes requiring employers to provide medical cover for their employees,” the report said.
Banks are also expecting a relatively positive year, with 44 per cent planning to boost their workforce. Only 8 per cent of surveyed banks plan to cut staff this year, compared to 38 per cent in 2016.
“With the economic outlook more stable, some are taking the opportunity to fill specialist vacancies that were left unfilled last year due to hiring freezes. Furthermore, most banks are actively expanding their collections departments to keep a grip on rising levels of loan defaults,” the report explained.
The oil and gas sector, which has been hit hard by two years of low oil prices, continues to downsize. However, only a third of firms are expecting job cuts in 2017, compared with almost half in 2016.
Construction remains one of worst performing sectors in the region, according to GulfTalent’s survey.
Up to 45 per cent of construction firms who participated in the survey reported plans to cut staff numbers this year, only slightly lower than 55 per cent in 2016.
“The sector has been hit hard by cuts in government budgets and cancelled or delayed projects. It has also suffered billions of dollars in delayed payments, in some cases resulting in wages for thousands of workers going unpaid for several months,” the report said.
Overall, the survey found that some of the companies reducing staff also plan to hire people this year.
“What we discovered was that, to cut costs, some companies are eliminating a range of jobs within their organisations, reducing department sizes and consolidating multiple job descriptions within a single hire,” said GulfTalent managing director, Yasser Hatami.
“This may be good news for those possessing a range of skill sets, though less fortunate for those highly specialised in a single discipline.”