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Gulf Businesses Show Optimism for 2012 While Banks Continue the War for Talent

Middle East : 05 December 2011

Gulf Banks Battling To Hire and Retain Talent

Banks throughout the Gulf region face a shortage of skilled staff and state that retaining talent continues to be a major challenge, based on recent survey findings.

The Accenture survey reported that 58 percent of GCC bank executives confirm that the largest challenge beyond regulation is a skill shortage. When focusing on only the largest banks that figure increases to 70 percent.

Retaining skilled staff was even more difficult and 89 percent stated that hiring and retaining top talent was the main priority to increase shareholder value.

Accenture surveyed forty-seven executives for this report.

With more global banking firms moving into the Gulf region competition for staff has increased. Over half of the banks have put salary and bonus increases in place, as well as adding mentor programs for staff development.

Accenture Middle East banking practice managing director Amr Elsaadani stated that increased customer expectations and higher demands for financial services will push that regional talent battle further, with banks searching for staff that can handle innovations and developments, as well as managing business growth.

The rush for Gulf bankers is contrasted by the job cuts happening in Europe, as the European banks post dismal Q3 earnings reports.

Over 3,500 jobs will be eliminated by UBS, and 1,500 positions will be cut at Credit Suisse. Deutsche Bank is set to eliminate around 10 percent of the staff in investment banking, while Nomura cuts 400 operations positions and BNP Paribas is planning to trim 1,400 jobs in investment banking.

Businesses in the Gulf Region Report Optimism for 2012

Growth prospects are high for Gulf businesses, as over 75 percent of those surveyed in the 2011 ICAEW Global Enterprise Survey reported plans to improve turnover. Many of those respondents anticipate growth in the double digits.

The survey covers ICAEW Chartered Accountants employed in key business positions.

Many firms in the Gulf are ambitious about growth, believing that certain challenges encountered in the recent past will fade.

Several issues have faded in urgency, including pressures from consumer demand and worries over late payments. Those respondents not located in the UAE still see consumer demand as a major challenge, while those within the UAE are less concerned.

Based on the most recent consumer confidence rankings by Nielsen, Saudi Arabia and the UAE are among the most optimistic nations. This report analyzes spending concerns and intentions within the third quarter.

On a global scale consumer confidence continued to fall, with 62 percent of respondents claiming their countries are in a recession.

Savings takes priority in the UAE and shrinking personal debt is important in the Emirates and Saudi Arabia, as both Gulf nations rank just below India in the Nielsen Index. Africa was the only other area where businesses reported higher levels of optimism than in the Gulf.

The latest PMI also reported a surge in business activity throughout the UAE in October, which will push output and growth up to a 4-month high.

Beginning and increasing exports is a priority for firms in the Gulf, according to the report. Seventy percent of businesses currently involved in exporting plans to experience growth in 2012, with two out of three reporting growth in exports for the current year.

Gulf businesses not currently exporting have plans to do so, with over 50 percent expecting to start within the next few years and one third with definite plans in place.

A shortage of management professionals and employee turnover are some of the reported challenges for Gulf companies outside of the UAE in 2012.

The one-year business objectives garnering the most survey mentions by Gulf firms were to improve return on capital, increase turnover growth and boost profitability. Fifty-five percent of respondents plan to pay down their debt and improve cash balances.

Budget Surplus in Saudi Arabia To Reach SR100 Billion

Economists are forecasting a massive Saudi budget surplus for the coming year, hitting SR100 billion. This expectation accounts for rising oil production and increasing prices, leading to revenue of SR1.1 trillion, the highest seen in the Kingdom since 2008.

Warnings have also been issued regarding global economic and political conditions, stating that oil prices may not increase next year.

Economist Fadhl Al-Boanain stated that budget officials have reservations regarding estimates, fearing that international markets may trigger change.

Al-Boanain attributed that surplus amount to the spending modifications authorities have put in place, as well as the rise in financial credits staying in line with revenue.

He noted that the budget surplus is positive, but also suggested that the amount be marked for emergency projects or to fund those projects delayed as a result of preliminary budget forecasts.

Al-Boanain maintained that all forecasts indicate an increase in budgeted expenditures and revenue, pushing those figures beyond expectations.

He added that confirmation came from the Saudi Finance Minister, who stated that both non-oil and oil revenue will nearly reach SR1.1 trillion. These figures also indicate that actual government expenditures for 2011 will be higher than announcements made at the start of the year.

Enormous infrastructure projects will likely be funded through the massive surplus, benefiting the Kingdom’s residents and the local economy.

Economic expert Intisar Al-Qahtani stated that government expenditures should hit SR850 billion.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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