2 reasons why it’s more difficult nowadays to attract expats to the GCC

There are a number of reasons why the “golden age” of easily attracting educated expats to the GCC is behind us.  I will detail financial and traditional reasons in this post, some more reasons in the coming one, and then will offer 3 tips for C&B to use in helping to attract expats to the region in my third post in this mini series.

 

Financial considerations

Since the beginning of the global crisis, salaries have been brutally adjusted down and are therefore not as attractive as they used to be. Many people have lost their jobs and have had to accept pay cuts of 15, 20 or even 30% for their new position at a new employer…. for the same job.

And the GCC currencies are tied to the dollar. Even in Kuwait where it is not a fixed peg but the local Dinar is tied to a basket of currencies, still  the dollar is the main driver. Since August 2007, it means that the value of the local currency has been playing yoyo against the Euro and the British Pound. This does not help to maintain attraction to the regional market.

Non-Resident Indians, in the mean time, have seen a double seesaw effect because at the same time, due to the boom in the indian economy, salaries in India are now becoming much more attractive and a number of educated Indians are either not leaving their country, or returning home. See also Is the Gulf dream fading for India’s Middle East diaspora ?, a very relevant article from Wharton University, which content also applies to all other expats. (You may need to register, it’s free and well worth accessing this great website).

On top of that, there are numerous rumours about some European countries currently considering either stopping or putting some caps to the double taxation treaties… For instance, the new double taxation treaty between Germany and the UAE was ratified a few months ago, and may in some cases mean that some Germans may have to pay full income tax… with retroactive effect over the past 2 years. That effectively would mean an end to tax free packages, one of the main attractions to working in the region.

Combine all these elements together, and you get a financial picture which is far from being as compelling and attractive as a few years ago.

 

Traditional reasons

There are a number of traditional reasons for resisting the idea of relocating, which are still around :

  • For most Western educated expats, the GCC is  considered to be a bit far from home. If you have a family where older parents or grandparents require some care, or where kids need to go to university, you will be less tempted by a relocation which is more than 2 hours flight away from your home country as this greatly limits the opportunities to go back home over the weekend if needed.
  • With the global  crisis, a lot of people are worried about what to do with their house in the home country. Selling it potentially means realising a loss on the value of the house. Renting it may not be so easy in the tight housing markets, especially as a lot of people are reluctant to have strangers live in their “home”.
  • With the exception of Saudi Arabia, GCC countries in general are tolerant of the western lifestyle,  yet a lot of people are concerned about the cultural differences and worry if they will easily adapt. This is compounded by the harsh weather conditions.
  • Finally, no matter how long one stays in the GCC, there is no chance of ever getting citizenship or being granted the opportunity to stay in the country at retirement time. Westerners are usually more transient in their time in the region, but a lot of educated Indians and regional Arabs spend many years in one or more GCC countries, sometimes building a whole life, having children and grandchildren in the country. Effectively, for them, the host country has become their home… but it will never be a “full” home as they can’t become citizens and take advantage from any state/social security benefits etc.

 

In my next 2 posts, I will cover a set of temporary (hopefully) reasons that make convincing educated expats to relocate to the GCC more difficult at the moment and I will propose some approaches that can help C&B attract expats to the Gcc.

 

Related posts :
The other reason why you find it more difficult to attract expats in the GCC
3 tips to help attract expat candidates

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  1. […] This entry is part 2 of 2 in the series Attracting expats to the GCCAttracting expats to the GCCTwo reasons why it’s more difficult nowadays to attract expats to the GCCThe other reason why expats are less attracted to the GCCMy previous post covered the traditional […]

  2. […] This entry is part 3 of 3 in the series Attracting expats to the GCCAttracting expats to the GCCTwo reasons why it’s more difficult nowadays to attract expats to the GCCThe other reason why expats are less attracted to the GCC3 tips to help attract expat candidatesIn […]

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