Whether you are a senior HR professional considering a move to the Middle East, or an organisation looking to an implement an appropriate HR function for the region, it is important to understand the revolution of HR in what is still classed as an emerging market. This is my view of the market since I moved here in 2011.

I moved to the region post-2008, and at that point companies were coming out the other end of the financial crisis. In particular, the multinationals where investing heavily in senior and specialist HR talent – regional HR Directors, reward specialists, talent management and in-house recruitment managers. Local diversified groups were also beginning to understand the benefit of hiring best practice HR into their leadership teams and as such made many high-profile appointments at Director and Board level.

The impact of the Oil Crisis

Come 2014, and the oil price crisis had a major effect on jobs in this region, With HR being considered a “cost” to the business, it was one of the first functions to be cut back. This crisis affected nearly every industry I worked with at the time, and the impact on HR jobs was huge. Many leadership HR roles were taken out altogether and regional responsibility handed to HR Directors in other countries. Learning & Development was now a cost to the business, and recruitment expertise was no longer required. This lasted for around 2 years, and by 2016 the HR market was almost non-existent at the senior end.

When a senior HR role was available, it was extremely hard to manage expectations – from both the Client perspective and the Candidates’. HR professionals in the region had become unrealistic on salary expectations and their worth in the global market. Without proper benchmarking on salaries, it was easy to demand and get a premium when the market was buoyant. But these salaries were not sustainable in an emerging market. Due to these high salaries, companies were slow to invest in HR technology and there was an over-reliance of HR consulting firms specialising in reward and talent initiatives. The gap between the HR Directors and team members was very wide, resulting in poor implementation of the HR strategy.

With so many companies reducing headcount in HR, there was no real strategic direction, under valued employees, frustrated managers and a lack of consistency in job roles, salaries and responsibilities. The HR market took a huge step backwards into operational mode and became a junior job market.

Where are we now?

For the last few years, companies were in survival mode but 2019 proved there is light at the end of the tunnel. The fact remains that the Middle East is a very ambitious and growing market, and the challenges for most companies are still the same – attracting talent, retaining talent, developing talent and rewarding talent.

The answer is to invest in the right HR function – not just an HR Manager who can do operations but a team of professionals with expertise in key areas of HR. If you do not have an effective incentive scheme (for examples, sales incentives aren’t achievable and performance is low) you need to be confident that your HR manager has a background in compensation schemes, or better still, hire a C&B specialist. If you don’t have a succession plan in place and your leadership team is reaching retirement age, make sure your HR has a background in competency modelling, job evaluation, development and coaching, or hire a talent management specialist.

It is also important that companies start hiring at the level they really need, not just based on the budget given. Yes, salaries have reduced, and expectations are now more realistic, but it is not a long-term solution to hire a junior person into a strategic HR role. They almost always fail without the right support and the impact on the business is much more costly. Companies will get a better ROI by hiring an experienced and qualified candidate.

HR needs to be properly defined for each business and structured in the most effective way – whether through specialist teams, shared services or operational teams. The appropriate level of HR needs to be hired and fairly compensated. Job titles need to be reflective of the skills needed and the level within the organisation.

By now, I believe companies are beginning to see the benefit of senior HR talent. Having been through many peaks and troughs in the HR market, it is my view that the companies experiencing growth and productivity are the ones who have invested wisely in the HR talent. People are still the most important asset to any organisation, and this is proven by the huge budgets allocated to the employer branding teams in the world’s largest brands – Google, Apple, PWC, P&G to name a few.

As we enter 2020, a very important year in the UAE, it is encouraging to see so many companies wanting to hire the best talent in their markets. The test will come after major projects like Expo 2020, and even the World Cup 2022. This is when we will see the real long term strategy of the Middle East – and the impact it will have on the job market.