Most Saudi firms to freeze hiring: SurveyMarch 2nd, 2009 - 4:54 pm ICT by IANS
Dubai, March 2 (IANS) The global economic slowdown is affecting Saudi Arabia, home to over 1.5 million expatriate Indians, with three-fourths of companies there expecting a freeze in hiring in the next two quarters of the January-December 2009 accounting year, according to a new survey.
The “Saudi Arabia’s Business Confidence Q1-2009,” the quarterly survey of HSBC Bank’s Saudi affiliate SABB, found that along with a freeze in hiring, there has been a significant dip in business confidence in the next two quarters as compared to the third quarter of 2008.
“As the slowdown in the economy is unfolding, we are not surprised with 74 percent of the respondents who expect over the next two quarters to institute a hiring freeze,” the survey reported stated, adding that only 26 percent of the businesses expected to hire over the next two quarters.
On the flip side, the survey found employers to be in good position as the labour market was no longer facing a dearth of skilled workforce.
Only 14 percent of respondents - as compared to 26 percent and 49 percent in the fourth and third quarters of 2008, respectively - said their organisations did not have all the required staff.
Additionally, 5 percent of the respondents - as compared to 10 percent and 20 percent in the fourth and third quarters of 2008 - expected their organisations to be “very insufficiently staffed” in the next few quarters.
Overall, 77 percent of the employers regard their companies to be adequately staffed.
However, the survey, which covered 765 companies, found that a significantly lower number of businesses expected growth in the second and third quarters of 2009.
Forty-two percent of the respondents expected business growth in the next two quarters “but it should be noted that this down from 89 percent we reported in Q3 ‘08,” the report said.
Stating that the economy of Saudi Arabia, the world’s largest oil exporter, was “not cocooned from the impact of the global crisis,” the survey report said business confidence index was down to 89.2, a 7.47 percent fall from 96.4 in the last quarter of 2008.
It attributed this to the following reasons: expectations of slowdown in business growth; further fall in oil prices in the first quarter of 2009, and anaemic performance of the local stock market, coupled with the worsening global economic environment.
There are approximately 1.5 million expatriate Indians in that Gulf nation and around 85 percent of them are engaged as blue-collar workers.
Remittances from these Indian workers till last year were estimated at around $3 billion annually, which contributed significantly to the Indian economy.
India is Saudi Arabia’s fifth largest trading partner after Japan, the US, South Korea and China. Saudi Arabia is the 15th largest market for Indian goods and services while India is the fifth largest market for Saudi Arabia.
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Tags: 10 percent, 5 million, accounting, business confidence, business growth, dearth, economy of saudi arabia, expatriate indians, flip side, global economic slowdown, hsbc bank, labour market, new survey, oil exporter, organisations, q3, quarterly survey, quarters, respondents, skilled workforce