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19 April 2024

Staff crises lead to reworking of salaries

By VM Sathish

A labour shortage in the construction and contracting sector has driven company managers to resort to creative staffing solutions to avoid fines for delays in delivery of their projects.

The lack of skilled manpower has made delays a real possibility and many companies have found it cheaper  to pay overtime for double shifts and restructuring to free up funds to pay higher salaries.

Mariam Azmy, director of human resources at Al Shafar General Contracting (ASGC), told Emirates Business the shortage in the construction industry was acute, but added her company had so far managed to escape project delays.

“We have accelerated project work by following a two-shift system and paying overtime. Even if there is a shortage, delaying projects involves penalty payments of millions of dirhams. Al Shafar General Contracting is working on projects worth billions and any delay could lead to the payment of fines worth several millions of dirhams. Fortunately, it has never happened in our company’s history, but the industry is worried about this risk,” she said.

In addition, ASGC has had to raise salaries to retain good workers.

Skilled staff from India who make up 80 per cent of the company’s workforce, she said, have seen salaries increase three to four times after more than 200,000 people left the country during the government labour amnesty last year.

“Earnings of expatriate employees are affected by high inflation and our company has revised payment packages in order compensate for rising costs. Life is becoming expensive here. All grade employees’ benefits have also been revised to compensate for the rising cost of life in the UAE.”

Ashok Pillai, general manager, FastTrack Recruitment, said companies in the construction sector have also reorganised internal management structures to be able to pay higher salaries.

“Contracting companies are under pressure because raw material prices are increasing, and project delays due to the labour shortage could invite huge penalties from both the government and private clients. Some companies are currently reshuffling top and middle-level management to avoid highly paid managers, who are drawing fancy salaries and packages. The site supervisors or managers can [now] directly report to the managing director or project manager,” said Pillai.

As an example, he said if a company manages to do without a manager who earns Dh60,000 a month, the savings could help increase the salaries for 30 to 50 lower-level employees.

The pressure to recruit has led to a salary boom for some much-in-demand workers. According to Pillai, a mason who used to be paid Dh600 per month a few years ago is now not available even for Dh1,000.

“Trained carpenters with four years experience can work as supervisors and site managers. And an experienced mason is demanding between Dh1,400 to Dh1,600,” he added.

Murtaza Ali Khan, vice-president, Abacus Consulting Dubai, agreed the labour market in the UAE is in flux. “The reform in labour rules has created tensions and difficulties for companies.”