Friday, 27 February 2009

A recession in Arabia


   I've been back in Dubai doing some work, having more meetings and presenting at an HR conference.

It's my first trip back since November, and the mood has changed dramatically - both in my clients and contacts I met in the UAE, and in participants at the conference who came from across the whole of the Middle East.  It's certainly been a complete reversal since my first, hugely optimistic post on the UAE last April.

HR people working in the UAE are now very somber, and especially so in Dubai itself.  Local banks haven't been affected in the same way as those in the west, but businesses are still impacted by the fall-off in global trade.  And people are concerned that Dubai resembles a giant pyramid scheme in which people have invested in new developments, sold out and re-invested in bigger opportunities - a model that only works while there remain new bigger developments to invest in.  Across the region, people are particularly concerned because of their governments' lack of transparency - they don't really know how bad things are.  However, in Dubai, there's widespread speculation that Abu Dhabi's latest investment of another $10bn of its oil wealth isn't going to cover the state's debts.

So UAE firms are taking the same actions the rest of us are, and are facing the same dilemmas too. At the conference, Ahmed Al Khalifa, Group GM Human Resources & Development at Batelco in Bahrain spoke about the need for HR to give the right advice to executives – to be surgical rather than think across the board when planning layoffs – and to look for areas of inefficiency.  And the CEO of Mobily in Saudi Arabia emphasised the need for leaders to role model the right behaviours, those which customers require (linked to Ulrich's leadership brand).

But I still believe the cloudy view has a silver lining.  Businesses in the UAE have been growing so quickly that their HR teams have had little time to do anything other than recruit.  There's now some slack and spare time in the system and wise HR Directors will use this opportunity to increase the professionalism of their teams, and to prepare for the future (or as Annie McKee said at the conference, to create an architecture for leadership once we come out of these turbulent times).  There's also a greater opportunity to attract talent from the west, who may not have been attracted to travel to the region before, but due to layoffs here, may now have enough incentive.

At the very least, the recession's made it a lot easier to get a taxi.



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