Fight intensifies to recruit, retain talent
Whilst the construction boom in the Gulf shows little sign of relenting, the problems facing companies locally in recruiting and retaining skilled staff are becoming more problematic, says Neil Morris, head of international client services at Digby Morris.
01 March 2007
As more key players enter the market and the broadcasting of large-scale developments continue, contractors and consultancies alike struggle to find the required number of skilled professional staff to run projects in what is now a fiercely competitive market.
On a daily basis, Digby Morris’ consultants speak with clients who are having to turn away work because they simply don’t have the manpower to satisfy demand from their own clients. In an attempt to avert a breakdown in the labour supply chain, the company has consulted with a number of its clients and examined some of the fundamental reasons that have resulted in this escalating shortage of industry-trained professionals.
The sheer volume of work is only one of the factors proving to be problematic in the Gulf’s human resource supply and demand dilemma. Employers from the Middle East are now not only competing with each other, but also with the rapidly growing market progressive boom in India, China and the rest of Asia, which has resulted in the worldwide shortage of qualified engineers, architects and commercial staff.
With particular relevance to the European expatriates, Russia – an area once disregarded by Western investors – is also quickly becoming a focal point of foreign investment thanks to surging construction boom. With increased levels of spending on building projects and infrastructure, Russia and other Eastern European countries find themselves vying alongside the Gulf countries for the best international talent to work on projects like the Federation Tower, a 340-m-high mixed-use development that is set to be the highest building in Europe.
With billions of dollars worth of retail, commercial and hotel and leisure projects under way in other overseas markets, professionals are afforded the luxury of earning their often tax-free salaries and getting career-enhancing exposure to major developments in other markets which have until most recently been dominated almost exclusively by GCC developers.
Rising prices
Despite the increasing trend for salaries to rise and some intervention from the government, the perceived fiscal benefits of working in what was historically a highly affordable region are diminishing rapidly as the escalating cost of living – most notably the cost of accommodation – shows little sign of slowing down.
Rising prices are not a total showstopper, however, as many people – Europeans and Americans in particular – travel to the Middle East for lifestyle reasons. Although, with this in mind, another major issue of noteworthy consideration is the six-day working week. A number of international consultancies and engineering firms operating in the Gulf have opted for the traditional western five-day rotation; but where demands from clients are so high and there is pressure to complete projects to often very demanding schedules, many employers are reluctant to follow suit.
This is particularly conspicuous on the contracting side of the industry and a number of firms confess to losing key staff to companies that have opted for the shorter working week. In essence, what is being said is that the principle of relocating for a better standard of living can only be realised if employees have the time to actually enjoy it.
It’s also true to say that the skill shortages are not just at mid and senior level, as several key clients of Digby Morris explain: “The hiring and retention of site staff is becoming increasingly problematic as salaries in India and other bordering countries enjoy the benefits of burgeoning construction markets at home. It’s becoming more and more difficult to attract skilled labour from overseas, as domestic salaries increase and so reduce the need for labourers to expatriate themselves in pursuit of their golden nest eggs,” says a client project manager of Digby Morris.
Salary increases
On the subject of increasing salaries, it is still obvious that the rate of increase has not been equal across all grades and that senior staff have seen a higher on average percentile increase than site workers. Considering the consequences should the matter not be addressed, strikes such as those seen at the Burj Dubai last year and general labour unrest are likely to become more common in the Gulf as the immense force of non-local workers tire of alleged exploitation from employers. Generally conditions in the main part do seem to be improving, but tensions are likely to remain until the balance has been fully redressed.
From a purely supply perspective in an industry that is facing a general decline worldwide, as less qualified engineers and construction professional join the labour pool, employers are faced with fewer approachable candidates to recruit. In the UK several consultancies have offered financial incentives to school leavers to engage in engineering and surveying-based degrees to stave off a long-term crisis as graduates enter potentially more lucrative careers in IT and financial services. But this type of action implemented in the Gulf only offers a very long-term solution to an immediate problem, not to mention the associated cost inherent in its application. Coupled with the shortage of Europeans and Americans standing up to the mark, India along with its neighbouring countries – which have been traditional recruiting grounds for companies within the GCC – now pose the challenge that their perceived means to provide an inexhaustible supply of low-cost talent is crashing head on with a very different actuality.
These hurdles represent a very real threat to the ongoing momentum of the Gulf's construction steamroller and in a market where a project’s viability was in the past generally guaranteed by an abundance of labour, the current limitation in breathing life into a scheme is a far more real issue of where to source the staff to build it.
* Digby Morris is a specialist recruitment consultancy working for consultancies, developers and contractors in the EMEA region with offices in the UK and UAE.
