GCC growth will rely on pragmatic salary packages

GCC growth will rely on pragmatic salary packages
Published: 12 December 2015 - 5:44 a.m.
By: Neha Bhatia

Are you happy with your job? Almost half of respondents to Construction Week’s 2015 Salary Survey intend to change roles within the next 12 months.

Of the 220 construction professionals who completed the survey, 49% stated their intention to move on from their current position during the coming year.

On the face of it, this sounds like a dramatic statistic, but on reflection, it is not altogether surprising. The GCC’s construction industry is in the midst of a slowdown that threatens ongoing and planned projects – not to mention job security – within both the public and private sectors.

Worryingly, several industry giants have already been compelled to downsize their workforces amidst ongoing oil price stagnation. A Reuters report in November 2015 claimed Saudi BinLadin Group will reduce its 200,000-strong organisation by 15,000. Whilst some of these lay-offs are effective immediately, other workers will be moved to work “temporarily” on the contractor’s ongoing airport project in Jeddah.

Elsewhere, US-headquartered machinery manufacturer Caterpillar will cut 10,000 jobs across its global offices by 2018, whilst UK-based JCB proposed 400 redundancies on its home turf in October 2015.

Commenting at the time, Graeme Macdonald, JCB’s chief executive officer, said: “Market conditions in the construction equipment sector have been difficult for some time, but they have worsened quite rapidly in recent weeks.

“The situation is not about to improve – certainly not in the short term – so we now need to take difficult but decisive actions.”

Naturally, global developments such as these represent warning bells for the Middle East’s construction sector, considering the region’s reliance on oil and trade revenues.

The fact that GCC powerhouses such as Saudi Arabia and the UAE are contemplating the implementation of taxation in the coming years could further burden construction organisations, which will have to ensure that remuneration levels match the increased cost of living in Gulf countries.

Perhaps cost-of-living increases explain why the majority of CW’s survey respondents (71%) anticipate salary increases during the coming year, despite only 40% having received pay rises in the past 12 months.

Job portal NaukriGulf’s September 2015 Hiring Outlook Survey reported optimism within the Gulf’s construction sector, with increased job creation on the back of Expo 2020 and the 2022 FIFA World Cup.

In October 2015, Guy Rickett, CEO of recruitment software firm Cazar, told Construction Week that he expects employment activity to increase by 5% in 2016.

But if fresh vacancies are to be filled, contractors and clients will have to ensure their remuneration packages and company profiles remain attractive. Speaking at the time, Rickett remarked that this is one of the greatest drawbacks of regional construction employers.

“Finding... talent, [such as] architects, civil engineers, and senior project managers is going to become increasingly challenging,” he said.

“Many of these professionals are expats who have misconceptions about the region. As the economies elsewhere in the world recover and big projects roll out, this pool of talent will have an even greater choice of companies to work for,” he continued, adding that GCC employers will have to ramp up marketing efforts to attract high-end candidates. Even so, Rickett noted that the Middle East is home to some of the most exciting construction projects in the world. With the right recruitment strategy, this region could have its pick of the crop.

The Gulf’s reputation as a hotspot for architectural and engineering excellence also seems to be paying dividends. Of the CW 2015 Salary Survey respondents looking to change jobs, 93% stated their intention to remain within the GCC.

Evidently, job seekers are willing to commit to employers within the region’s construction sector. This is in spite of the challenging economic climate, in which further job cuts are likely to be necessary to ensure that organisations do not buckle under financial pressures.

Nevertheless, it is vitally important that construction companies do not allow remuneration to slide. Government investment will continue to contribute to job creation, but to a lesser extent in the shorter term. Now more than ever, the onus is on the private sector to plug the gaps in the GCC’s job market.

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