Shockwaves from West Asia war clouds hiring, bonus at firms with Gulf links in India

SHock-joint waves from the westward Asia state of war feature slammed hiring for roles based in Dubai, saudi arabian Arabia and Qatar, while companies operating in the region review expansion plans.Global search firms said companies with planned or existing exposure to the region are putting senior-level hiring on hold amid rising uncertainty. Consulting firms also warn that bonuses could come under pressure for companies exposed to the region as the conflict disrupts sectors such as energy, real estate, construction and logistics. Track latest updates from US-Iran war here“There was a lot of hiring activity taking place for the UAE and Saudi Arabia as both those regions were dependent on expats heavily…The region now is a phase of uncertainty and plans of clients to expand into the region are being reviewed again,” said Puneet Kalra, managing director for executive search firm Russell Reynolds Associates. Kalra also advises on boards and chief executives for the search firm.“In the case of the UAE, the expat talent has been there for decades now and several call it home so the impact, while still there, might be limited. For Saudi Arabia, which had only recently accelerated efforts around diversifying the economy, the impact on talent willing to move there may be significant,” Kalra noted.The conflict has roiled markets. Brent crude prices surged past $120 a barrel on Monday, the highest level since July 2022, before giving up some gains; the Indian rupee slid to a record low of ₹92.33 against the US dollar. Brent traded under $90 on Tuesday, after US President Donald Trump indicated that the war may not take long.The ripple effects could show up in compensation. Consulting firm Aon, which advises companies on pay structures, warned that bonus payouts may come under pressure.“While the projected salary hikes will not get impacted, bonus payouts in some companies in the energy, supply chain, logistics and construction sector with exposure to the West Asian countries could see a reduction,” said Roopank Chaudhary, partner and rewards consulting leader, talent solutions, India, for Aon.While consumer and pharmaceutical companies are likely to remain relatively insulated, it is important to see if the conflict fuels inflation, Chaudhary said. “If inflation does rise, real adjusted wages will get impacted.”As per Aon’s recent study of 1,400 firms, India Inc is expected to roll out a 9.1% hike in 2026, with those employed in the real estate and infrastructure sectors and non-banking financial companies (NBFCs) touted to receive the highest increment.The timing of the conflict adds another layer of complexity for companies that were absorbing the impact of labour codes rolled out last November.A recent Mint study showed that 25 of India’s top 30 suffered a nearly ₹12,000-crore blow to their third-quarter profits in fiscal year 2026. The labour code mandates higher social security contributions from both employers and employees, while also boosting retirement benefits.“This is a clear supply side shock but we feel more structural factors like labour codes and economic growth/consumer demand will determine the hikes and bonuses for 2026,” said Anandorup Ghose, partner with Deloitte in human capital consulting. “Having said that, long drawn conflicts with broader impact on supply chains might naturally create a big gap.”Ghose highlighted that companies that give pay hikes effective 1 April have broadly finalized budgets and this will possibly not change anything. “And those that do it in July/August still have a couple of months to see this current situation evolve”.Interestingly, the situation may also create some hiring opportunities within India.