Gulf Business March 2011 | Salary Survey

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The last 12 months saw a marked improvement in the Gulf job market after several years of caution, layoffs and salary freezes. On the whole, vacancies increased and nascent levels of confidence began to emerge among candidates and employers.

At the start of 2010, it was firmly an employers’ market and the few companies that were hiring held absolute power. The post-crisis unemployed masses that battled for dwindling job openings swallowed whatever meager remuneration came their way.

However, Gulf Business’ annual Salary Survey reveals that this is not the case today, although it’s clear that the pendulum hasn’t swung all the way in employees’ favour. Higher salaries are up for grabs, but only for those who are excellent at what they do. On the whole, recruitment experts say those who are highly sought after are increasingly able to call the shots.

Christo Daniels, managing director of recruitment company Morgan McKinley UAE, said: “The good news is that the volume of hiring has increased from last year. At the start of 2010, Dubai World’s debt announcement was only a few months old, so the recruitment market was still reeling. In response, everyone battened down the hatches,

so the year’s opening recruitment drive was delayed.

“This year, in the last few weeks of January and into February job boards were very busy and the biggest indicator of a positive change is that hiring at recruitment agencies themselves started to pick up.”

He added: “It’s no longer an employer’s market, but the balance of power hasn’t yet gone full circle.

Employees are likely to be given more choice in that they can look at non-freezone, as well as freezone openings, so they’re not restricted as much in that sense. The volume of applications hasn’t increased from 2010, what we have seen is a change in the calibre of the applications.”

Evidence shows that Gulf employers’ appetite for hiring has grown steadily in the last 12 months. According to a recent Bayt.com survey, just seven per cent of respondents stated they had no plans to recruit, down from 10 per cent in 2010. Indeed, most employers are looking to fill up to five jobs (46

per cent) and around 23 per cent of employers are looking to fill between six to 10 positions this year.

Amer Zureikat, vice president for online sales at Bayt.com, said the telecommunications sector is leading the charge to back up recruitment plans with higher wages. “Telcos have been one of the most active players in offering higher salaries to attract talent, closely followed by the retail sector and banking and finance firms.

Factors that have driven salary trends are good personal performance, good corporate performance, inflation rates and growth in opportunities.”

George Stothard, the Middle East director at Fabric Recruitment, a headhunter that specialises in the PR, communications, sales and marketing sectors, said although there’s still a shortage of vacancies to provide jobs for the majority, talented individuals are commanding healthier salaries. “There is occasionally a bun-fight over the very best people but what is interesting is that even in those circumstances,

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our global clients are refusing to be forced into a corner on price.

“Our clients are not minded (yet) to go down the road of offering silly money to people. I would define 2011 as being a year where talented, sensible people manage to get good jobs at sensible prices,” Stothard added.

Bumper pay for HR managers The Gulf Business Salary Survey 2011 found the biggest sea change since the Gulf recession has been the dramatic overhaul of companies’ HR functions, especially in the UAE. Pay for an Arab expatriate head

of HR increased 62 per cent compared to last year, with average monthly salaries rising to $20,863 from $12,861 (see table 1), while for a Western expatriate employee in the same position pay grew 43 per cent (see table 3). However, most striking was the spike in remuneration for Asian HR professionals, which jumped 73 per cent in the UAE from $9,735 a month to $16,823 (see table 2).

Bayt.com’s Zureikat added: “The impact of the financial crisis was to force companies to further improve their HR policies and procedures. They had to deal with increased regulations and corporate issues with local laws.

Hiring more skilled HR executives means offering higher salaries.”

Arabic language dictates salaries Meanwhile, the downturn heralded a dramatic turn in fortunes for talented Arabic speaking professionals in the Gulf, especially in the banking and finance industry where a multimillion dollar deal could hang on an individual’s language skills.

Prior to 2008, Arab expatriates battled the influx of talent from London or New York, but with the global economic collapse came a mass retreat among international investment banks. Deals between native banks in the region filled the void, with the Arabic language a lubricant for business.

With Western firms less active in the Middle East at the start of 2010, a larger share of deals were done by regional players.

To meet this demand employers upped their pay threshold.

For instance, in Saudi Arabia, a CEO or managing director with sales in excess of $50 million saw on

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average a five per cent pay rise from $35, 846 a month last year to $37,207 in 2011 (see table 1). In isolation this appears modest, but because Arabic business language has always attracted a premium, spikes in demand are more likely than huge fluctuations in salaries.

Furthermore, when the same positions in Saudi were offered to Western expatriates, employers drastically reduced pay levels – highlighting a burgeoning salary gap. It also underlines one thread throughout the entire survey, that there’s still a substantial amount of openings for candidates that do not speak Arabic, but the tide is rising for those that do. And in turn employers are willing to strengthen remuneration packages.

The exact drop in salaries for Western expatriate CEOs and managing directors working in Saudi was 25 per cent, with on average a decrease from $35,367 a month in 2010 to $26,696 this year.

“Our clients are not minded (yet) to go down the road of offering silly money to people. I would define 2011 as being a year where talented, sensible people manage to get good jobs at sensible prices,” Stothard added.”

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TABLE 1

average monthly salary in US$ for an ARAB Expatriate employee

CEO/MD with sales $50m+ CEO/MD with sales $10-50m CEO/MD with sales $1-10m General Manager – Multinational General Manager – Local Company Head of Human Resources Head of Information Technology Head of Sales/Marketing – Multinational Head of Sales/Marketing – Local Company Hotel General Manager Accountant Sales Manager Business Development Manager Real Estate Manager Banking – Branch Manager Banking – Treasury Manager Banking – Retail/Personal Banking Manager Media – Advertising Creative Director Media – Public Relations Director Media – Publishing Editor Construction Project Manager/Chief Engineer Executive Secretary/PA TOTAL AVERAGE 2011 TOTAL AVERAGE 2010 % VARIANCE

BAHRAIN

KSA

KUWAIT

UAE

OMAN

QATAR

27,232 22,018 13,940 14,942 13,561 10,118 9,363 11,276 9,266 7,593 5,649 6,485 6,850 9,869 8,783 11,105 9,698 7,933 7,493 5,056 8,490 3,689 10,473 10,587 -1.1%

37,207 29,557 21,869 25,170 19,158 14,633 11,108 13,168 11,810 9,390 8,700 8,560 8,963 11,600 11,074 13,600 11,768 9,050 11,267 8,225 12,054 4,856 14,218 13,983 +1.7%

31,235 26,050 18,457 20,502 18,883 11,673 10,407 11,428 9,582 9,140 6,975 6,776 7,025 9,150 9,650 12,700 10,258 8,200 8,883 7,400 10,760 4,244 12,244 11,536 +6.13%

31,182 24,568 18,463 22,428 18,324 20,863 11,329 12,161 10,463 7,384 7,704 7,553 7,803 8,075 9,503 11,109 10,266 8,192 9,307 6,321 10,951 8,182 12,824 12,168 +5.4%

22,800 17,963 10,950 14,106 11,780 7,704 8,950 9,465 7,975 7,450 5,981 6,853 6,985 6,967 8,688 11,210 9,289 5,467 6,017 5,713 8,970 3,680 9,316 10,615 -12.2%

26,904 19,836 14,106 17,275 13,265 9,938 12,189 12,312 10,363 9,360 7,498 8,363 8,800 7,765 9,860 11,990 10,963 6,313 6,480 4,485 10,997 4,433 11,068 12,972 -14.7%

Recruitment experts say that in highpressured industries like financial services almost everyone connected to banking can do business in English. But Arabic language skills provide customers with a degree of comfort and familiarity.

Sales and creative take a hit In the wake of the global financial crisis, a huge swathe of employers downsized their Gulf operations, haemorrhaging staff at unprecedented levels. The first to go were often sales and marketing positions, along with business development personnel. In early 2009 and into 2010, as the supply of these professionals dwarfed demand,

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HR managers have witnessed huge pay hikes as companies deal with new laws and regulations.

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TABLE 2

average monthly salary in US$ for an Asian Expatriate employee

CEO/MD with sales $50m+ CEO/MD with sales $10-50m CEO/MD with sales $1-10m General Manager – Multinational General Manager – Local Company Head of Human Resources Head of Information Technology Head of Sales/Marketing – Multinational Head of Sales/Marketing – Local Company Hotel General Manager Accountant Sales Manager Business Development Manager Real Estate Manager Banking – Branch Manager Banking – Treasury Manager Banking – Retail/Personal Banking Manager Media – Advertising Creative Director Media – Public Relations Director Media – Publishing Editor Construction Project Manager/Chief Engineer Executive Secretary/PA TOTAL AVERAGE 2011 TOTAL AVERAGE 2010 % VARIANCE

the asking price for talent swiftly reduced. The results of Gulf Business’ survey suggest that this trend has accelerated over the last 12 months, especially for Western expatriates trying to earn a living in the region.

In Qatar, a Western head of sales or marketing at a multinational company would now be offered on average 15 per cent less than last year, a decrease of $15,213 to $12,937 a month (see table 3). In Kuwait, the cut is from $14,168 in 2010 to currently $11,840 (17 per cent drop).

Meanwhile, among local companies, the fall is even more pronounced, with Western sales executives in the UAE making 20 per cent less basic salary ($15,197 versus $12,092 a month) compared to last year’s survey. In

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BAHRAIN

KSA

KUWAIT

UAE

OMAN

QATAR

23,717 19,419 12,756 13,828 10,758 8,083 7,353 8,951 7,027 6,313 4,441 5,370 5,888 8,300 7,863 9,760 8,370 7,325 5,550 4,338 6,985 2,715 8,869 8,906 -0.4%

30,426 23,928 18,269 19,598 13,871 11,275 9,826 11,767 9,803 6,583 5,735 6,308 7,478 8,988 9,403 11,968 10,066 6,988 8,888 5,925 9,586 3,425 11,368 10,355 +9.8%

28,111 24,850 17,092 16,243 12,233 9,355 8,148 9,770 7,852 7,430 4,925 5,688 6,470 7,438 8,348 10,715 8,816 7,150 7,463 5,675 8,203 3,119 10,231 9,312 +9.8%

26,841 20,039 15,568 16,891 12,499 16,823 8,901 10,635 9,333 5,406 5,291 6,068 6,983 6,390 8,022 9,721 8,359 7,799 7,716 5,588 8,827 5,498 10,418 9,173 +13.6%

25,138 17,383 13,458 14,804 11,547 8,852 7,500 9,200 8,063 6,788 4,566 5,621 6,476 8,700 7,491 9,933 8,093 6,700 6,025 5,138 7,509 2,991 9,181 8,300 +10.6%

29,463 19,396 15,933 17,153 13,487 9,898 9,473 10,892 9,706 7,336 5,181 6,261 7,446 9,210 8,254 10,425 8,813 7,360 7,328 5,146 8,627 3,536 10,469 9,619 +8.8%

Saudi, the drop was also 20 per cent, from $15,836 to $12,604.

Much the same can be said for Western business development managers, with Bahrain employers reducing salaries from $8,327 to $7,100 (15 per cent). A similar pattern emerged from the survey results for the Kuwait and UAE markets.

Ian Giulianotti, associate director of human resource management consulting at NADIA recruitment, said: “A lot of the high costs associated with the head of sales disappeared in the last two years as executives lost their jobs. As they were replenished, obviously the packages were scaled down.

“The areas most affected by the recession were marketing and

business development, so the last year has seen a small recovery but there are still replacements being made but at lower salary levels. In this sense, salaries are a reflection of increased demand and reduced supply.”

In the same vein, as marketing budgets were ratcheted back in recent years, so too were the salaries of Western media executives, who were initially hired in the boom years for their experience in more mature markets.

All GCC countries in the survey slashed pay for advertising creative directors in the last year, but most dramatic

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TABLE 3

average monthly salary in US$ for western Expatriate employee

CEO/MD with sales $50m+ CEO/MD with sales $10-50m CEO/MD with sales $1-10m General Manager – Multinational General Manager – Local Company Head of Human Resources Head of Information Technology Head of Sales/Marketing – Multinational Head of Sales/Marketing – Local Company Hotel General Manager Accountant Sales Manager Business Development Manager Real Estate Manager Banking – Branch Manager Banking – Treasury Manager Banking – Retail/Personal Banking Manager Media – Advertising Creative Director Media – Public Relations Director Media – Publishing Editor Construction Project Manager/Chief Engineer Executive Secretary/PA TOTAL AVERAGE 2011 TOTAL AVERAGE 2010 % VARIANCE

was Oman, which now pays nearly half (48 per cent) what it did in 2010.

Employers on average pay creative executives $5,467 a month compared to $10,550.

Zureikat said: “This is another reflection of what has happened in the region, especially in the financial services industry. Companies are being more frugal about their marketing activities and are looking for more effective media in which to spend their budgets.

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BAHRAIN

KSA

KUWAIT

UAE

OMAN

QATAR

25,333 20,567 15,883 17,848 13,561 10,817 9,183 11,530 9,150 8,735 6,173 6,450 7,100 6,593 10,398 13,625 10,791 7,742 7,800 5,775 11,385 3,943 10,926 11,916 -8.3%

26,696 22,955 19,175 19,215 13,688 12,373 11,643 13,808 12,604 11,904 9,481 9,735 11,200 8,410 12,388 14,949 21,117 9,050 10,600 8,944 16,364 4,358 13,257 14,927 -11.2%

29.813 25,413 20,383 20,217 16,417 14,067 10,924 11,840 8,640 10,900 8,013 7,650 8,863 9,350 10,736 14,388 11,290 9,350 9,650 8,263 14,463 4,498 12,960 13,020 -0.5%

32,610 26,727 21,994 22,912 16,788 22,270 12,058 12,953 12,092 10,529 8,783 8,285 9,600 10,017 11,103 13,997 11,328 9,169 10,936 8,276 14,716 8,613 14,352 14,472 -0.8%

28,383 22,138 17,767 18,117 13,183 10,575 8,930 10,295 8,458 8,588 6,988 6,400 7,550 9,075 9,620 13,550 10,000 5,467 6,592 6,863 11,897 4,010 11,111 11,504 -3.4%

23,775 18,019 15,339 16,023 12,836 9,713 11,297 12,937 12,140 10,535 8,613 8,550 10,100 7,497 11,222 14,194 11,686 7,784 9,062 7,360 13,958 5,226 11,721 13,588 -13.8%

Real estate marketing is a classic case of this.”

In general, two years ago many creative agencies in the Gulf were making redundancies and slashing salaries across the board, but they have since become leaner and their salaries have returned to pre-crisis levels, according to experts.

Stothart added: “The PR industry in particular has definitely become leaner and more hard-nosed when it comes to handling recruitment.

Many of the global agencies felt the pinch – some severely – so the need for a quick return to profitability has been a wake up call to hiring managers. There is much less enthusiasm for offering big pay hikes when hiring new people.”

Competition kicks off in Qatar News of the 2022 World Cup winning bid has resonated around the region, injecting a dose of optimism into the tired limbs of professionals across most industries. In response to the colossal building process Qatar has on its hands, companies will begin a vigorous hiring process over the next 18 months.

Daniels at Morgan McKinley said: “Salaries will have to move upwards in Qatar as clearly the engineering sector from now on until 2022 will drive things from that perspective.

Expect a huge strain in the Qatari housing market, as more middle management and executives are hired for key positions.

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SALARY SURVEY CONTRIBUTORS Nadia – The Gulf’s leading recruitment and management consultants.

P.O. Box 9349, Dubai, UAE Hotline: 800-6236 Tel: +971 4 3313401 www.nadia-me.com

Qatar companies will begin hiring vigorously ahead of the World Cup in 2022.

“This year will be about the contracts that are being bid for.

When this is decided, the manpower will follow. Salaries in Qatar will definitely be affected by the influx of hired but that won’t happen until the contracts are in,” he said.

The outlook for Qatar in many ways echoes Dubai’s experience in the early years of its rampant growth. As companies frantically built-out their businesses and increased headcount, the housing market and salaries levels were in turn changed forever.

Daniels added: “Based on this past experience and the current outlook for Qatar, I wouldn’t be surprised to see up to a 30 per cent increase in salaries for key sectors in the coming years.”

Japan’s cooling influence If Qatar’s burst of activity is likely to inflate pay over the next decade, then the growing presence of Asian firms, specifically Japanese, could cool the fire, according to Giulianotti at NADIA. “The Japanese ethic is to pay below market rate but they

offer long-term job security. I’ve placed people in jobs 20 years ago at Japanese companies that are still there. Regionally, we’ve seen an influx of Japanese companies consolidating their presence in the Gulf.

“The increased Asian influence in the market offers security rather than affecting salaries in the shortterm. The Yen is at an all-time high so it’s a great time for them to invest in the UAE, but also the Gulf generally,” added Giulianotti.

On the whole, the results of this year’s Gulf Business salary survey provide a clear indication that pay scales and the job market in general are in the recovery position, but for many professionals they are by no means out of the woods just yet.

The results show that where opportunities do exist, talented and experienced individuals can prevail and are receiving a handsome reward in return. But as the balance of power continues to swing away from employers and candidates grow in confidence about their worth, the challenge will be to avoid the unsustainable salary levels, jobhopping and hubris of the past. n

Charterhouse Partnership – A boutique recruitment firm offering services across the Middle East, Asia and Australia.

Suite 502, Al Moosa Tower 1, Sheikh Zayed Road, Dubai, UAE Tel: +971 4 372 3500 Fax: +971 4 332 8062 E-mail: info@charterhouse.ae www.charterhouseme.ae BAC Middle East – The longest – established recruitment consultancy in the UAE. Office 120, Sultan Business Centre, P.O. Box 8743, Dubai, UAE. Tel: +971 4 3375747 Fax: +971 4 3376467 www.bacme.com Morgan Mckinley – A management executive recruitment company.

103/104 Oud Metha (Citibank) Building.

P.O. Box 118468, Dubai, UAE. Tel: + 971 4 324 4094 Fax: +971 4 324 4095 E-mail: talktous@morganmckinley.ae www.morganmckinley.ae Manpower – A world leader in workforce solutions.

Office 205, Building 1, Dubai Internet City, P.O. Box 26359, Dubai, UAE. Tel: +971 4 3910460 Fax: + 971 4 3910465 E-mail: info@manpower-me.com www.manpower-me.com

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