At this point in the year, when Gulf banks are scrambling to meet localisation quotas, it’s near impossible for expats to find a new job. However, despite a shortage of candidates, the days of locals earning a premium are slowly falling behind us.

Hiring within the Middle East domestic banking sector has been muted throughout this year, but with firms required to meet ever-increasing localisation targets, there’s still a desire to take on local candidates.

“Emiratisation is the number one priority for local banks, and this applies across all levels,” says Peter Greaves, director, head of financial markets at headhunters McArthur Murray. “There remains a shortage of local candidates, so anyone with a decent amount of experience under their belt will always be in demand.”

Just how reliant the region is on expats was highlighted in a recent report by The World Bank. Foreign workers still account for 70% of the population in the UAE, which is the third highest ratio in the world, it said.

But both domestic banks and international institutions have been making efforts to increase their local workforce from the bottom up. National Bank of Abu Dhabi, for instance, said that it aims to recruit 300 locals by year-end, while Barclays Capital, Deutsche Bank and JP Morgan have all rolled out graduate schemes for Saudi locals this year.

In the past, however, there has been the suggestion that banks – particularly in the UAE – employ locals in figurehead positions to meet quotas, while the real work is carried out by skilled expat talent.

“The days of banks ghosting in locals to meaningless positions are long-gone,” says Charles Wilson, a nationalisation expert and senior HR advisor to the Chartered Institute of Personnel and Development. “Banking can be viewed as one of the few areas where localisation has been a success – it pays well, has comfortable working conditions and high status attached to it, so can attract a good number of locals.”

Still, one of the main reasons so many have been so attracted to banking is the money, with relatively scarce supplies of talent leading banks to pay locals around a third more than expats.

This is beginning to change, says Wilson.

“Sensible companies are paying by job grade, and not the nationality of the person who fills it. The pay disparity is therefore disappearing,” he says. “However, the benefit packages offered to locals are still greater than those offered to expats and, following the financial crisis, expatriate brains are a lot cheaper.”

Moreover, the region as a whole has learned its lesson on paying by nationality having been “stung” by the IT sector, suggests Wilson. Companies relied on relatively cheap labour from India, who were initially paid on the relatively low eastern expat salaries.

“Some very good IT people came out of India, and they stayed here for five years before moving to North America. They then returned with US or Canadian passports and were paid as Western expats – much more money for practically the same job. So, smarter companies are adjusting their pay practices.”