HR solutions provider Aon Hewitt released its annual Global Salary Increase Survey.
Early last month, HR solutions provider Aon Hewitt released its annual Global Salary Increase Survey, which confidently projected a 4.8 percent hike in salaries for UAE companies in 2015, albeit down from 5.1 percent last year. The predictions were slightly higher for companies across the GCC (5.1 percent) but, again, had dropped from last year’s 5.5 percent increase.
These forecasts sit somewhat in contrast with the recent spikes in the Emirates’ housing, education and gas prices. According to the National Bureau of Statistics, inflation increased by 2.32 percent in the UAE, where residential sales prices jumped 27 percent year on year in May 2014, reveals the IMF (International Monetary Fund), when compared with the same period last year – naturally translating into higher rent prices. Trefor Murphy, managing director at consultancy house Morgan McKinley MENA, says salaries in some industries, such as oil and gas and construction, are not increasing at all – other than during annual appraisals. When it comes to the ad industry, the Bayt.com 2014 Top Industries survey shows that advertising and media offer the sixth most attractive salary package in the MENA region and seventh in the UAE.
“The market is unrecognizable from when I first came here in 2006,” explains Justin McGuire, managing director at MCG Associates, an agency specializing in recruitment in the communications industry, adding that the rise of digital and cultural diversity in the UAE has greatly affected its salary levels – indeed, Communicate’s 2014 salary survey shows a year-on-year increase in wages for digital execs that look to be making, in some positions, more than their traditional counterparts, as a slew of agencies beefed up their digital departments and units in 2014.
Coupled with the influx of talent from the trouble-laden Eurozone, the demand for more specialized digital skillsets has led to this fresh pool of talent “creating [its] salaries, as there was no benchmark. As the digital sector and clients’ demand to create an Arabic digital pool is growing, the salary levels are going through the roof,” explains McGuire.
“The skillset of new recruits has to expand over all of the media channels regardless of the position,” says Khaled Abounader, director of talent and learning and development management at VivaKi, who thinks that the “global financial crisis, the fall of the real estate market and political unrest in the region” have all played “a major part in shifting the recruitment scene”. This has resulted in a scarcity of talent in the region, which has led VivaKi to rely on recruitments agencies to lure talent from outside of the UAE.
According to the Bayt.com survey, rent hikes are the primary cause for the increase in costs of living in the UAE, followed by food and beverages and utilities. Naturally, this year, employees expect a salary raise to accommodate their growing expenses. “Most people are looking for between AED5,000 and AED8,000 [increments] on top of their salaries,” claims McGuire, while Mahesh Rajasekaran, HR manager at Cheil MEA, says that 30 percent to 40 percent hike in rents, rising school fees and other day-to-day expenses are pushing people to look around for better salary packages. “There’s an increase [in salaries] this year of between seven percent and 10 percent [versus four percent and five percent last year]. I would easily estimate an increase between 10 percent and 12 percent next year as well,” he says – in response to Communicate’s survey, both big and small agencies have admitted to a “slight” readjustment of wages in line with Dubai’s rising costs of living, with few putting it at exactly five percent, and others within the range of 10 percent to 15 percent. But, many are carefully maintaining a “balance” between salary schemes for new joiners and older employees, and are trying to provide more intangible benefits to both.
In addition to adjusting salary offers for new recruits, integrated media agency BPN is doing the same for its existing staff to keep it happy and focused on work, rather than on personal problems. “Due to inflation, we are going beyond our usual policies to make sure that our talents are satisfied and content,” explains Antonio Boulos, vice-president of operations at BPN MENA. “For the right talent, we would go up to [offering] 10 percent [or more]. But, on the whole, there is an increase of five percent,” he adds.
Omnicom Media Group (OMG) MENA, too, is on a par with industry readjustments; Fadi Chamat, the group’s regional executive director of talent and organizational development, says that it is offering salary increases between five percent and 10 percent. However, Sasan Saeidi, managing director at FP7/UAE, suggests that the agency might be restricted by company policies – which are based on performance – when it comes to appraisals. He feels that it is important to look at the staff as “humans first and employees second”, because “in order for us to get the best out of them [employees] – which means getting the best out of the company – we need to make sure they are happy and have a peace of mind”. It’s not clear how the agency plans to adjust employees’ salaries above and beyond company policies, but Saiedi says it is in line with the market, wages having inched up, on average, between five percent and 10 percent in the past year. “If [the increase] is not on a par with the cost of living year on year, then, obviously, we need to increase it, which we try and do,” he adds.
VivaKi and Lowe clearly have a different opinion. While VivaKi’s Abounader admits that “a company can’t keep up if it doesn’t adapt and evolve with the city [it is based in],” he says “inflation in the region and rent prices are never an indicator to us”. However, while he claims the company takes these factors into consideration during reviews, he makes it clear that “increases are based on accomplishments and success metrics” only.
Mounir Harfouche, CEO of Lowe MENA, blatantly says: “We can’t really do anything above and beyond the company policy because our costs and overheads are growing too. I’ve never heard of any agency raising salaries because of rent hikes. They are giving increments because employees are due to get increments.” Businesses are not growing at the same rate as inflation is, he explains, which puts agencies in a rather awkward position. “We can’t really ask clients to increase the retainer [fees]. It’s not that the market and revenues are doubling,” he says.
However, if agencies do not offer higher salaries to new employees, it might pose a problem in a market where talent is scarce, which is why, Harfouche says: “To be honest, it could reflect in salaries offered to new recruits. When people come in, they have certain expectations and, if you like them, you are willing to offer a little more, even if it goes against specific budgets.” BPN, however, keeps fair pay across new recruits and existing employees.
The excessive demand for Arabic fluency and specific skillsets, especially in digital media, is not met by regional supply, leading agencies to pay “astronomical” salaries, according to McGuire, and leaving job seekers in a position of commanding inflated packages. “[Today 20-somethings are earning salaries that a 40-year-old would be drawing four years back] and that is purely a product of the digital evolution, because digital, by its very nature, is an entrepreneurial business for which you need young adopters,” he explains.
The UAE’s buoyant economic recovery from its 2008 slump, twinned with the announcement of Expo 2020, has clearly led to agencies re-injecting investments into expanding their teams. BPN has beefed up its staff by 25 percent and is still looking to hire more across the board – with an emphasis on digital. Overall, Lowe has filled nearly 20 positions this year and is investing in a digital team within the agency.
“Clients are willing to spend more money, so sales managers, sales directors, marketing managers and marketing directors are the most sought-after positions. From an agency point of view, [this] will reflect in [the growth] of client servicing [professionals], who will need to be backed by a strong operations team of copywriters and graphic designers,” explains Muhammad Younas, product director at Bayt.com.
There is also a strong need for newer specializations in advertising in the region. Cheil MENA is looking for juniors and seniors in client servicing and experiential marketing, Rajasekaran says, to grow its events and retail team. “To be able to compete with tech giants, we have been creating purely technical positions that require a unique skill set [for] bidding platforms, data and analytics, branded content and others,” says Abounader. While their responses to Communicate’s survey don’t suggest that agencies are exactly on a hiring binge, they show that they are, in fact, increasingly looking at cross-platform, cross-language specialists, such as Arabic copywriters and designers and omnichannel planners. One, in particular, is looking for “digital and street smartness”.
McGuire puts it quite simply: “All of the agencies are looking for the same position: an Arabic-speaking digital manager”. And there arises the problem.
“No one c an find [Arabic-speaking digital managers], because they’ve [agencies] all headhunted off each other,” jokes McGuire. “So, then, you start having to look abroad and wonder if there’s a global shortage of digital managers,” he continues, adding that this poses a bigger problem, since “you can’t hire Arabic-speaking talent from outside of the region”. Boulos agrees that BPN is facing the same gap, due to which the agency has recruitedfrom outside of the GCC.
Abounader feels that tech giants such as Facebook and Google have been stealing the limelight and causing a “major recruitment threat”, as young talents prefer to explore the opportunities – not to mention entrepreneurial leeway – offered by these popular companies. However, Lowe’s Harfouche admits that he can’t say if there is a regional scarcity of digital talent, as the industry is still struggling to define what digital really is. “We are getting better, but we are always delayed in terms of trends and we don’t have any newcomers with digital education coming through. So, it is easy to find people that now want to join digital,” he says, adding that this leads to bringing in talent from abroad that has the expertise for senior levels, but it leaves a void in mid-level positions.
While the industry struggles with finding the right digital talent, Saeidi feels that “it’s not just digital. Yes, the number of people that can call themselves digital natives is relatively less, but the whole industry is lacking talent”, and that a lot of the regional talent, especially for senior positions, is getting “recycled. [And] when it comes to junior levels, we have an issue. The industry is not heading towards good times, because fresh graduates are below par when it comes to the focus and attention they need to have,” he says. This is going to be a problem as the younger generation takes over the industry and the older generation phases out. Harfouche, too, agrees that the younger generation is now driven by money, rather long-term career growth.
This baby shark mindset gets particularly challenging when agency culture comes into play; for most agencies, it’s important to find the ‘right fit’, as much of advertising is a cohesive effort. In this regard, Rajasekaran feels that junior talent is less flexible and adaptive, and comes in with a preset attitude toward work and remuneration. “Hire for the attitude and train for the skill,” says OMG’s Chamat.
As agencies struggle and wrestle to find the right talent, they – knowingly or unknowingly – end up ignoring their existing employees. “Most people tend to leave their jobs because their current employer hasn’t increased their salary to keep up with the cost of living demands, and the only way people can get these hikes is by looking elsewhere,” says McGuire.
“The bit that we are finding completely incomprehensible is the counter-offer. And it’s getting increasingly high. You’ve got an abundance of jobs, and not enough good people to fill them. Every company has this problem right now; there’s this layer where some people are being paid two tiers above the standard level, particularly Arabic-speaking talent,” adds McGuire, whose agency recently lost 50 percent of candidates due to counter-offers.
Employees are looking for greener pastures and agencies are looking for skilled employees. This has almost automatically led to haphazard poaching practices, but it’s hard to say who’s to blame: employees, agencies or, most conveniently, the market. “It’s the mistake of the agencies. They are narrow-minded when it comes to talent and try to steal people,” says Harfouche.
He also suggests that agencies should believe in themselves and their culture to groom and retain employees, rather than go for money-driven tactics. Speaking of counteroffers, he asserts: “This is wrong because agencies have a certain responsibility to be ethical towards themselves, the client and the market. They just do it because they have promised the client to kick-start the business. But, they cannot sustain it. The client is not going to pay them double”, which leads to agencies either under-delivering to clients or engaging in heavy cost-cutting. Saeidi concurs: “If you are true to yourself as a company, you won’t go through that system cause you are destroying that market and that person’s career path because they’re not ready yet.” “We have been having nightmares with other agencies winning an account overnight and wanting someone to fill the gap. They are offering 50 percent [extra] at times and that’s something we cannot match. We never offer such a steep increase,” explains Chamat.
With all big agencies pointing fingers at the rest of the market, one has got to wonder: who’s doing all of the poaching? “The award-chasing big agencies have got no one left in their creative teams and they are paying through their nose because their single biggest goal is winning awards. So, they’re looking for anyone that has got a Cannes Lion next to their name,” remarks McGuire. Yet, he feels that companies are ready to invest in hiring Western expats as they often come here, set up specialized departments and train juniors. In this case, even if they leave after a few years, the investment is value for money. “They [agencies] pay premium for these guys because they train the rest that are already from a media background and, thereby, create a natural succession,” he says.
Investing in “non-salary-based incentives and training and culture” has become even more important now to retain employees, Saeidi says. He believes there needs to be a lot more effort from agencies, and a bigger role for the IAA to play in deciding university curriculum and exporting fresh talent. If agencies go on overpaying employees in the hopes of quick hires and ignore the lack of quality talent in the region, “it is going to be an issue five years later, if not addressed now,” he adds.
Saeidi and Younas both agree that agencies need to broaden their horizons and hire talent from outside of the region. “I think they [agencies] need to take a bit of risk in terms of trying out fresh talent. [They might not] have experience in this country, but [might be] great at what they do in their respective countries; if agencies become open to that, they can find a lot of great talent,” explains Younas. Chamat, however, finds his solution within the agency: “Our solution is to grow people from within. That’s why we have all of these extensive [training] programs.”
But, for McGuire, it’s a “lose-lose” situation, as there aren’t enough juniors coming through the ranks to keep up with the demand. “The biggest thing is that it has gone from a client-driven market to a candidate-driven market. As the economy grows and this sector moves forward, it’s only going to get worse.”