Construction Week’s 2018 Salary Survey is complete, and its findings show that there are some areas for concern apparent in the Middle East’s construction sector. However, as has been the case years prior, other data points offer reason for optimism.
Of the 119 survey respondents in this year’s cohort, more than half work primarily in the UAE (64) and 18 are employed in Saudi Arabia. The remainder are employed in Bahrain, Kuwait, Oman, and other Middle East countries. Most work in a middle management-type role – a department head, for example – with 20% in a junior management or supervisory role.
As was the case in the survey’s 2017 iteration, the majority of respondents in 2018 – approximately 57% – said they would look to change jobs within the next 12 months. Speaking to Construction Week on this specific data point, Mark Andrews, managing director of Laing O’Rourke Middle East, believes sees this figure to be “extraordinarily high”.
He adds: “I would imagine that’s more a comment about the fact that people are concerned about the workloads [faced at their respective] companies, but are committed to trying stay in the GCC. Therefore they recognise that to do that, they may need to switch companies.
“There are specific, company issues. There are a lot of companies that aren’t treating their people right, either by default or design. I would certainly be very concerned about that figure [from CW’s 2018 Salary Survey].
“We’ve just done an employee engagement survey and 90% of our people see themselves being with us in three years’ time which is completely counter to what this survey is saying. [It reiterates] the underlying [trend] that if people want to stay in a certain region, you’ve got to go by the project, not by the employer.”
Despite this, and however alarmed employers may be knowing that the majority of their workforce may look to change jobs within a year, those same respondents said they expected to remain in the GCC – welcome news for the region’s construction market in terms of its capacity to attract and retain top talent.
However, Andrews believes this figure says more about people wanting to stay in the GCC for their lifestyle, personal, and family requirements, and may have less to do with the job market here.
“I see a lot of people here that have gotten used to and like the place; they’ve got their families who are comfortable here and would rather stay than go back to wherever their homes may be,” Andrews explains. “I feel that’s probably what’s coming through these results, rather than people [saying] that there is a particularly attractive market for jobs.
“There are other markets elsewhere that have a lot more activity and are probably doing things in a way that you could argue, career-wise for certain people, could be more stimulating. But people have gotten used to a lifestyle here, and when a family is comfortable, they’ll be reluctant to move.”
This point is somewhat validated, given 22% of those surveyed said they had worked in the GCC for more than 15 years. A similar figure (23%) have lived in the region between 11 and 15 years, with 22% now having spent six and 10 years in the region.
Like Andrews, Robert Jackson, managing director for the Middle East and Africa (Mena) at the Royal Institution of Chartered Surveyors (Rics) and interim managing director for its Europe, Middle East, and Africa (Emea) operation, believes this figure is “high when compared to other parts of the world”.
“It does reflect the project nature of work in the GCC,” he explains. “Many of the projects in the GCC are large, complex and challenging which present a great opportunity for professionals to work on major schemes and in doing so acquire new skills and experience that they may not have had the opportunity to experience in their homes market. This sentiment is also fortified due to the increased number of projects that are to be awarded in the region in 2019, adding to the plans of many professionals to stay in the region.”
Of those who intend to leave the GCC, Europe retains its crown as the destination of choice, with 39% of respondents preferring the continent this year. Bucking the trend in the 2017 Salary Survey, which saw 23% cite Australasia as their second preferred relocation choice, the Indian Subcontinent was the 2018 cohort’s second choice (19%). The Asia Pacific was tempting to 14%, followed by North America (10%) and Africa (9%).
“Europe is currently a very buoyant market with significant investment going into infrastructure and real estate,” says Jackson. “Job security and protective labour laws are also very favourable in Europe once [professionals] are employed.”
Average working hours within the GCC’s construction community appear to have remained stable year on year, although they exceed the recommended pattern of eight-hour work days. Once again, the most common category among this year’s respondents was an average working week of 46 to 50 hours (38.05%). Around 5% of the cohort claimed to be working in excess of 71 hours per week – a 3% increase on 2017 – while nobody reported average working weeks of less than 36 hours.
Once again, air tickets home were the most common benefit among 2018 respondents (72%). Accommodation or related allowances came in second place (72%) – the same as in 2017 – followed by a company car or car allowance (65%), commission or bonuses (32%), and school fees or schooling allowance (8%).
A perennial issue in the GCC industry relates to cash flow across the region’s entire supply chain. This dynamic has been cited by industrial professionals including Greg Kane, managing director for WSP Middle East, who told Construction Week earlier this year that of all its global markets, the Middle East is where the firm must wait the longest to get paid.
PwC Middle East’s Capital Projects and Infrastructure Survey, released in May 2018, also found the region’s “governments and industries continue to face challenges and pressure to perform and deliver ‘more for less’ on social and economic infrastructure projects, despite an increase in oil prices compared to 2016”.
When asked to pick the likeliest cause of their delayed salaries, approximately 33% of all respondents cited payment delays to their employer from its clients. Sixteen percent cited industry-wide cash flow problems as a reason, and poor financial management by employers was a primary issue according to 13% of the respondents.
“We have never missed a salary run and we have no intention of doing it,” says Andrews, speaking on the figures. “It’s about managing the cash properly, but it is challenging in an environment where there are so many delays in payment for whatever reason. Certainly, data evidence indicates that there are plenty of main contractors and sub-contractors who have struggled to pay their people, from time to time. That is a pretty diabolical situation.”
Jackson elaborates: “There is undoubtedly an industry-wide problem with a tightening of liquidity in the market compounded by payment retentions, in some cases for unjustified reasons. It is in the interests of all stakeholders to keep cash flowing and make payments on time where warranted. [They must] adopt rapid forms of dispute resolution and avoidance to mitigate situations where payments may otherwise be withheld.”
Indeed, in the context of the GCC, Andrews says an argument could be made that some companies “currently trading could be technically insolvent or bankrupt in other regimes, but they carry on even if they have got no money”.
The situation, he explains, has emerged from a combination of an industry-wide problem with cash payments – which he says “is undoubtedly there” and “goes top-to-bottom in the supply chain” – and companies lacking the discipline and attitudes to manage cash properly.
“It seems like most companies in our industry are [currently] struggling to get work, and I think that [covers] contractors, consultants, and developers; there’s a definitely a slowdown going on, and when people can’t see where their next job is in a particular company but want to stay in the market here, they will be prepared to move,” he adds.
Construction Week’s annual Salary Survey, as a rule, serves to shed further light on the trends causing concern for employees and, by extension, regional employers. Much in the same light as the 2017 iteration, this year’s results indicate broader economic challenges such as cash flow and supply chain management continue to dominate the narrative.
Moreover, in a similar vein to 2017, the majority of employees want to stay in the GCC. But, with the majority stating their desire to change jobs within 12 months, the notion that employees are eyeing projects rather than companies when deciding their next move is becoming an apparent theme. Certainly, regional employers will have to refocus their efforts in 2019 to ensure they retain the best of their workforce.
Andrews concludes: “Employers have to pay employees on time, offer training and development, the right opportunities for people to develop in their roles, and try and develop a healthy work environment for people. These are all things that employers have to actively work on – it’s not just going to happen by default.”