Outlook on labour markets with a looming regional conflict in the Middle East

Recent events in the Middle East have created great concern for world geo-political stability and the resulting financial “mutterings” are already being felt through financial markets. This “instability” tends to have an immediate effect on the global jobs market and whilst certain international economies are experiencing significant growth, such as Saudi Arabia and the broader Gulf region, hiring optimism tends to react immediately to uncertainty and instability with corporate hiring intentions muted. This won’t stay in this condition for long, however.

The threat of a broader regional war in the Middle East will see the price of oil rise but contrary to this notion, the price of crude dropped on the news that Iran’s attack on Israel on the weekend was completely blocked by the Israeli air defence system.

Wheels within wheels and the financial ramifications on inflation for instance will be felt almost immediately. Realistically, we are likely in for a bumpy ride.

This aside, there will be tremendous job opportunities both regionally and globally as markets strive to take advantage of transient labour. The COVID period created unfathomable demand for skills which is only now being satisfied. One of residual effects of the global lockdown has been that human capital has becoming more transient and inclined to migrate across borders. The global skills shortage is ensuring the competition for scarce skills and experience will remain high as organisations broaden their sourcing reach to now incorporate international candidates.

As an example, Ubidy recently engaged a new client in the energy distribution market who is utilising Ubidy to project their sourcing capability onto the world stage as their local market has become saturated with competition. It has opened a realm of hiring possibilities as well as an opportunity to source consistently “high-level” candidates from markets they have been unfamiliar with. In being able to source candidates in real-time on a global footing provides an immense competitive advantage when it comes to hiring talent. This is a small example of what is happening on a broader scale.

What we are experiencing is that unlike any time in the past, talent scouts and recruitment organisations are projecting themselves onto the world stage. It is no longer a challenge for a recruitment agency to place people internationally. Placing talent across borders is becoming as easy as placing people regionally with the digital tools available to facilitate cross border movement and payments such as Deel. The market opportunities for an agency are immense and the brand value that comes from working on the world stage can provide significant reputational benefits.

This talent search trend is no surprise due to the talent sourcing challenges as the latest International Labour Market Update for 2024 issued by the Australian Government confirms (we featured a breakdown of this in our previous blog here):

• labour markets remained tight in the second half of 2023 and global shortages were high in the care, transport, retail, manufacturing, construction, and information and communications technology sectors.
• in the December quarter 2023, job vacancies remained above pre-pandemic levels in most high-income economies.
• the International Labour Organisation forecasts global unemployment rates will rise modestly in 2024 because of increased joblessness in advance economies.

Because we are living in such a dynamic and fluid skills marketplace there will always be a massive demand for talented people, and whilst we experience these economic hiccups from time to time, people will continue to source exceptional people and exceptional people will look to the global jobs market for career opportunities. This phenomenon is only going to grow over time.