Dubai startups facing employment issues with optimism, resolve

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An aerial view of Dubai. Photo - AP

Over the last four decades, Dubai has transformed from a sleepy fishing town to one of the biggest business hubs in the Middle East that is attracting billions of dollars in investment and seeing thousands of companies flock to open their businesses in the modern city. High-rise buildings have sprung up in every corner of the city whereas new offices are being readied and transferred to their owners so that business activities could formally begin.

The hustle-bustle is in line with business statistics maintained by the Dubai Government. The Department of Economic Development (DED) announced last week it issued 14,360 business licenses last year with professional services and tourism sectors bagging seven and five per cent of the total licenses respectively.�While thousands of licenses have been issued, formation of a new small business in Dubai is still a very challenging task. There are many angles that one has to look into when starting up a business in Dubai.

The main requirement when starting up your own business is to get a local partner who will own the majority of the stake in the business. Though technically he enjoys a say in the business, practically ‘sponsors’ do not intervene in business matters unless it becomes imperative.

One thing that you also need is the local knowledge. It is a must for any business since one needs to know the market to be in the market. You also will have to show the Ministry of Commerce that you have a substantial amount of money to invest when you are getting your company registered.

All this can be done with a little bit of dedication, courage, and a considerably large sum of money.

CHALLENGES

The real issues arise when you start hiring for your company. The structure of the UAE population is such that the majority are expats who need to have a working visa to be in the country in the first place. This visa is sponsored by the company that the individual works in, making it rather difficult for them to change jobs as easily as they want, especially, if they are to be hired by a small business which is just starting up.

Many workers tend to be skeptical about job stability in such markets conditions. Losing a job would mean that they would have to pack up and leave if they are not able to find another soon enough.

For many of these companies the only option is to hire fresh recruits from other countries, but still it is not an easy thing to do since the number of visas that a small business can obtain is limited. A new startup can get 4 -5 visas of their own depending on the size of the company.

Paola Fernando, a manager at a newly founded advertising firm based in Dubai, says many graduates are caught up in a catch-22 situation.

The young graduate came to Dubai from Sri Lanka a year ago with the same aspirations that many people have when they first come to Dubai – to be successful while earning good money. After being employed at a small advertising firm which was founded not too long ago, she was given the responsibility of getting it off the ground by recruiting people and getting in new business.

She has faced many challenges while recruiting for the company�during her first 6 months on the job.

�Since the visa process is a little tricky, we decided to stick to employing staff that already have their own visas, mainly women,� Fernando said. Despite saving company’s costs towards employment visas, the move came with the risk of high turnover. �As soon as they got better prospects from other companies they (new recruits) left and we could not do a thing because there were no restrictions holding them back,� the advertising executive explained.

It is easy to get lured by individuals who have their own visas since the cost of recruitment will be considerably less for these companies and there is a considerable amount of individuals who are living in the UAE on sponsor’s visa (father’s or husband’s) and looking for employment.

SECOND OPTION

To counter the drawbacks of hiring people on sponsor visas, Paola Fernando tried the option of working with freelancers and see how they can benefit her start-up business.”Freelancers can be a good option if you manage to get hold of a few professional ones. They save your costs towards full-time hiring while delivering services that can be as good as a full-time employee,” she said.

However, the Sri Lankan advertising manager soon discovered the catch. “I tried to tap the freelancers’ market as well which also proved to be fruitless since most of the time accountability with freelancers is very low,” she revealed.

�There are thousands of people in Dubai looking for jobs and we get hundreds of CV�s out of which only a handful are qualified for the job. Most of the time those who are qualified are already employed and face a potential labour ban if they are to quit their present job and start working in a new company,” Fernando added while highlighting the much-debated labour laws that at times prove tricky for employers.

She explained: “Since we are a new company, we are unable to offer salaries more than AED 5,000 (per month) to our new employees which will save them from a 6-month employment ban for changing jobs before their existing contract finishes.�

LAST RESORT

Hiring people from abroad can also prove to be a bit disappointing as, in some cases, the candidates interviewed and selected for the job changed their mind once the employment visa was ready.

When Fernando was asked about her plans for the future, she said: �It is very easy to give up in a market like Dubai since there are many challenges that you have to face, nevertheless, anything that you do in life, you must keep looking until you find that one thing that will work out for you,� she said.

�We will continue to look for the hidden gems in the market that are willing to start small with us and strive to grow as the company grows. We are now looking at drive and thirst for growth in our candidates more than experience, with a hope that the company will also grow through their passion,� Fernando concluded with a smile.

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