Qatar Professional Services sector: Tentative Confidence Gains Pace

HSBC’s inaugural Qatar Professional Services virtual Roundtable addressed several themes, including growing confidence in the country’s post-pandemic recovery, the state of restructuring and M&As and shifting talent dynamics. Senior leaders from the professional services sector joined the event, which included a regional outlook from Mike Littlewood, Sector Head of Professional Services for Commercial Banking in the Middle East and North Africa (MENAT) and national insights from Elie Maroun El Asmar, Country Head of CMB at HSBC Bank Qatar.

Brighter outlook takes shape 

According to delegates at the roundtable, Qatar’s outlook is on an upward trajectory – and it is expected to keep climbing. The country’s GDP is expected to strengthen by 2.4% this year, said the International Monetary Fund (IMF).¹ This relatively robust post-pandemic recovery is driven by several factors. For one, Qatar now ranks eleventh worldwide in terms of vaccinations against COVID-19 per 100 people.² That nearly 40% of its 2.5mn population³ has already received both doses sends a strong signal that the country is “open for business”. Adding to the positive outlook are stabilising oil and gas prices (Qatar is one of the world’s biggest LNG exporters)⁴ and strengthening trends in intra-regional activity. Also, delegates said Qatar is seeing an influx of investment to support its hosting of the FIFA World Cup 2022.

“Clearly, there are numerous positive factors fueling Qatar’s recovery and the growing confidence in the Professional Services sector is well justified. Equally, the longer economic impacts of the COVID-19 pandemic are yet to be felt, so markets need to stay on their toes and keep adapting in order to maintain ultimate competitiveness,” said Mike Littlewood, Sector Head of Professional Services for Commercial Banking in the Middle East and North Africa (MENAT).

Finding a new balance

One area driving this optimism is the country’s growing trend for public-private partnerships (PPPs), which delegates from consulting firms said is being backed by strengthening government-led support, including the new PPP Law.⁵ This aims to streamline and accelerate PPPs while giving governmental authorities flexibility – as well as giving a very clear signal to local and international investors. Delegates also put a spotlight on Qatar’s rising appetite to explore new opportunities with trade partners in Russia and Türkiye – one to watch as the “world increasingly opens up”, they agreed.

A rise in the “M” of “M&A”, i.e., mergers and restructurings, has also emerged, especially in retail, construction and the real estate market. One delegate said his company’s operations did not have a M&A and restructuring team in Qatar in 2017; now it has a team of ten professionals supporting all manner of public and private companies. And the number of corporate restructuring cases in Qatar so far may not be fully reflected in current reports, so an increase is something to watch out for, according to a delegate from a law firm.

“All factors indicate that Qatar’s market fundamentals are really strong and we expect a robust 2021 – and an even better 2022. The country’s AA rating has been confirmed and there is already a trade surplus for the first quarter of 2021 – a different story to this time last year. Overall, Professional Services are well-positioned to take advantage of these growth factors,” shared Elie Maroun El Asmar, the Country Head of CMB at HSBC Bank Qatar.

Impact of new talent dynamics?  

Recruitment activity in Qatar is certainly intensifying, with businesses and talent drawn by Qatar’s lifestyle proposition, as well as the allure of hosting the FIFA World Cup 2022. In one barometer of demand, a delegate from a recruitment firm said his company’s minimal activity in Qatar in January and February this year suddenly doubled in March and April, despite the ongoing impacts of the pandemic, resulting in 45 placements. Against this backdrop, Qatar continues to appeal to international talent, a delegate from a consulting firm pointed out.  One significant consequence of the pandemic has been the rise in remote working – a trend that is expected to continue post-pandemic. While there are many plus sides, including businesses having access to a far broader pool of talent, there are also pressure points emerging in Professional Services.  For one, general appetite to work in the sector is declining, especially amid the younger generation as many are missing out on in-office learning and inspiration from more experienced staff.

“Work culture has essentially taken a gap year amid the COVID-19 pandemic and this means that Professional Services in Qatar and beyond must start thinking about how to address the challenge of attracting and retaining talent, whether they work remotely or in the office,” flagged Littlewood.

Another consideration with remote working is that it weakens the ancillary benefits of in-country hires, as new in-country staff would support Qatar’s fee-paying school systems, local services and the real estate market, for example, delegates said. Couple the latter with the aforementioned growth of restructuring and the volume of real estate assets that banks are trying to de-risk becomes even clearer, delegates added. Overall, Qatar’s landscape is clearly still shifting as the government-led financial support and appetite from local and international investors find their way through the knock-on effect of the pandemic-spurred strains of 2020. But delegates agree that the outlook is undoubtedly upbeat as long as Qatar sustains a key ingredient: proactivity.