The labour market in the Gulf after the expat exodus

  • foreign workers
Published on 2021-07-07 at 07:00 by Momentsing
The Gulf Cooperation Council (GCC) countries of Oman, Kuwait, United Arab Emirates (UAE), Saudi Arabia, Qatar, and Bahrain, are popular destinations for foreign workers of all skill levels. Following the news about the migrant exodus, however, expats interested in moving to the region may have some concerns about future employment opportunities. But not all hope is lost for potential job seekers.

The GCC countries are generally attractive destinations for expat employees across many industries and skill levels, due to a variety of factors including job opportunities, lack of personal income taxes, and generally good quality of life. According to the International Labour Organization, the migrants in the GCC countries account for over 10% of all migrants worldwide. Foreign workers, in general, make up large portions of the population in individual countries. For example, Statista reported that expats made up 89% of the UAE's population in 2018. 

More recently, however, the overall expat numbers have taken a downward turn. One cause of job losses is the COVID-19 pandemic, and migrant workers on employment visas may have to leave within a specific timeframe after losing their jobs unless they can find new employment. S&P Global Ratings reported in February 2021 that they expected the population in the six GCC countries to decline by around 4% in 2020 due to the expat outflow after the COVID-19 pandemic and the oil price decline. 

Additionally, the GCC countries are also focusing on reducing expat numbers and providing employment opportunities to nationals. S&P Global Ratings expect the foreign-worker population to continue to decline, especially in Kuwait and Oman. The report further stated that the GCC population might not return to the 2019 levels until 2023 due to a weak economic environment and labour nationalization.  

For example, Oman is focused on reducing the expat population with its Omanisation policy, aimed at replacing foreign workers with trained nationals. S&P Global Ratings noted that the expat population in Oman declined around 12% in 2020. Similarly, Kuwait is another country focused on reducing the expat population. Al Bawaba reported in February 2021 that the expat population in Kuwait declined by 4% in 2020, citing figures from the Public Authority for Civil Information. 

The future for expat job seekers in the GCC

The migrant workers in the GCC are from several regions, including the neighbouring Arab countries, developing Asian nations, and the developed world. Employees from developed nations are generally highly skilled and known to attract high wages, and hence expensive hires for organizations. Therefore, companies may have a more rationalized approach to hiring, especially with the ongoing economic challenges, in addition to the focus on hiring nationals. 

However, highly skilled employees, for example, are vital for organizations as well as the overall economic growth, and there will be a time lag to achieve a similarly skilled labour supply locally. Competing for a limited number of skilled local employees may make them more expensive. Thus, companies and nations will have to balance profitability, growth, and labour policy plans. 

The International Labour Organization's “Labour market assessment: Market trends and opportunities in Ethiopia and the Gulf”, first published in 2020, stated that the demand for migrant workers in the GCC states will continue to increase in the next decade. The report stated the strongest demand will be “in the construction, care work, hospitality and agricultural sectors”. 

S&P Global Ratings, in its report, also mentioned that the UAE and Qatar were less restrictive with their labour policies. 

Therefore, if you are an aspiring expat, not all opportunities are lost. There will still be jobs for expats with skills that are in demand, especially as the pandemic eases and economies begin to recover – which we hope won't be too distant in the future!