emand for staff in Dubai rises like glittering Dtowers in the desert. The petrodollars from across the United Arab Emirates (UAE) have fuelled the region's growth, creating a broad-based market economy teeming with workers from around the world.

Dubai is a draw for industries in a variety of sectors, all of which face dramatic staffing needs. The total number of employees in the UAE grew by 7.9% last year, according to the UAE Ministry of Economy, causing Dubai's population to increase by 7.7% to 1.48m.

Recruiters continue to seize the opportunities in the region. In June alone, Arm, Carter Murray and NOW Recruitment all opened offices in Dubai City. However, has the recruitment market in the Emirate state reached maturity after years of development or is there still time for a new wave of UK-based recruiters to make an impact?

Carter Murray launched its office in Dubai after the success of legal recruiter Taylor Root, its sister company. "In comparison to any of our other international offices, it was the most profitable," Fionnuala Munnelly, associate director of marketing recruiter Carter Murray told Recruiter: "The team was powering ahead in terms of fees, clients and revenue —this year's targets have already been hit."

The continued expansion of the labour market in Dubai, and the recruiters who follow it, is reaching new heights as agencies and consultants seek to insulate themselves from the economic climate in the UK.

"The credit crunch has been a catalyst and a motivator to push people in this direction or at least consider their options — a phenomenon seen before in previous market downturns," says Clive Carlin, director of recruitment-to-recruitment agency Carlin Hall, making reference to the economic downturn in 2001, which spurred UK recruiter growth in Australia and Hong Kong.

Carlin told Recruiter the number of placements the company is making in Dubai has gone up by 30% since the beginning of the year, after rising steadily for some time.

However, recruiters moving to the region are facing stiff competition from agencies who have already set up shop.

"The firms who are looking to break into the market now are a little behind the times," says Mark Houghton, director of Michael Page Executive Search, Middle East. "There are players who have been here longer and have big, international networks — they have snapped up a lot of the business."

Michael Page's Dubai branch grew from five consultants to 24 in its first 18-months of operation and there are plans to open a second branch and hire 40 more consultants by the end of the year.

Recruiters have been attracted to the region by an increase in internal investment and the creation of free zones over the past 20 years. The zones create areas of the city which operate under different legislation, allowing non-UAE nationals to own businesses outright and operate tax free.

"We are based in the Dubai International Finance Centre (DIFC). It's essentially a free zone; our business is classified as being offshore," says Piers Webster, Middle-East managing director of technology and finance recruiter MRL. "Everybody in our business isn't sponsored by MRL, but directly by the DIFC. It is well geared up to take care of all the visa issues," he says.

However, recruiters have expressed concern about the experience of the courts which govern the free zones.

"Because the DIFC is relatively young, compared to the UAE as a state, the law isn't quite as advanced; there are some holes in it. There are no [legal] precedents like you have in UK law," says Webster.

The DIFC is built around the iconic Gate Building, to the East of the Emirates Towers, but it regulates businesses across the city which are on the waiting list for office space that hasn't been built yet.

"In Dubai space is a big, big issue. When I talk to people about growth plans, they don't plan to expand because they can't fit any new people in the office," says Munnelly.

Houghton also thinks entry into the DIFC has become a problem. "There's a struggle for people to get a physical presence here now — it's a struggle for people to even get licences to be recruitment firms here," he told Recruiter.

James Noble, operations director of finance, construction and IT recruiter NOW Careers Middle East, NOW Recruitment's Dubai subsidiary, launched the company's Dubai office outside of the free zones to take advantage of cheap rent and local contacts.

"It suited our business to not be in a free zone — the cost of rent is a lot lower," says Noble, who found office space to be over 35% cheaper. However, he adds: "It took three months from start to finish, and there was a lot of red tape and hard work."

Finding consultants to staff the ever-growing number of recruitment agencies is increasingly difficult. Webster says one of the biggest challenges MRL is facing is competition for staff. "We are feeling the pinch more than we were even six or 12 months ago, in terms of bringing consultants on board," he says.

Recruitment companies are attracting staff with the opportunity to weather the economic storm, while earning tax-free money in a growth market and enjoying the lifestyle and climate. "It's massively vibrant, a huge amount to do. It's very much a party town," says Houghton. The economic climate in the US and Europe may encourage more consultants to make the move to Dubai, reducing staffing problems.

"The credit crunch has meant many clients are tightening their belts, and this makes it harder for consultants to earn the big bonuses they are accustomed to [in the US and Europe]. They may be able to earn the big bonuses easier in these developing markets, especially in Dubai where the market is buoyant," says Carlin.

Webster warns that rising costs may counter an increase in salaries and commission offered to consultants moving to Dubai. "One of the illusions people have is that the streets are paved with gold. They are in some regards, but it's also an extremely expensive place to live," says Webster.

International politics and business news magazine The Economist reported that house prices rose by 30% in 2006 and another 17% in 2007. The government has attempted to cap rental increases at 5% this year, but landlords often change tenants to avoid the limitation.

While Dubai offers the opportunities to earn money tax free, the rate of inflation reduces the benefits felt by recruiters working there. Official figures put inflation at 9.6% in 2006, although press sources in the region place the figure much higher.

Networking in Dubai's ex-pat community is one of the primary methods of sourcing staff, according to Gary Redman, managing director, NOW Recruitment. "All the recruiters go to the same bars — it's like a mini-Britain out there. You build up a good network quickly."

NOW Careers Middle East is staffed by four British nationals, one domestic employee and one from Holland. Redman estimates 75% of recruitment consultants working in Dubai are from the UK.

The rapid expansion of Dubai has created massive staffing needs. While international companies take advantages of growth in the region and access to free zones, recruitment has been booming.

Houghton believes recruitment companies will be essential, as companies attempt to cope with constant expansion. "The businesses here are growing at such a phenomenal rate that the infrastructure isn't there at the moment; they have had one or two people managing monumental amounts of recruitment," he says.

An Arabian business confidence survey found 52% of companies are looking to expand staff in Dubai over the next six months and the skills shortages in the construction and finance sector are particularly severe.

Growth in the Middle East will provide further opportunities for recruiters looking to expand and diversify. The six members of the Co-operation Council for the Arab States of the Gulf, have announced or begun internal projects worth $1.9 trillion (£955.8bn), according to the Middle East Economic Digest.

Neighbouring Emirate Abu Dhabi is also building at a phenomenal rate. According to a study commissioned by the Abu Dhabi National Exhibitions Company, in 2007 construction projects worth 24.59bn UAE dirham (£3.37bn) took place.

Munnelly already has her sights set on Abu Dhabi: "The number of roles, contacts and enquiries I get, I wouldn't be surprised if we could open up there soon. The growth is huge," she says.

Recruiters have been following Dubai's growth for years and the market hasn't yet reached maturity. But it isn't a new frontier any more, as recruiters compete for space, clients and consultants, battling against established players. The next big thing may be a short drive down the E10 motorway, to Abu Dhabi.