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06 June 2023

Wages hiked to retain skilled manpower

By Parag Deulgaonkar



Retaining trained and skilled manpower has become a difficult task for real estate developers, which is leading to increase in salaries of more than 100 per cent, industry sources said.


“First it is difficult to get good and skilled people and then retaining them is more difficult than that. We have raised salaries by more than 100 per cent and in some cases by 200 per cent,” a senior executive of a Dubai-based real estate company told Emirates Business on condition of anonymity.


A project manager with six to eight years of experience is now earning between Dh50,000 and Dh60,000 per month compared to Dh20,000 to Dh25,000 per month last year.


“We have announced projects and these need to be completed on schedule. We cannot afford to lose people. We will not see them performing better if they are not happy,” he said.


There are more than 520 developers in Dubai registered with the Real Estate Regulatory Agency, and the list if growing, said Chief Executive Marwan bin Ghalita.


If the industry grapevine is to be believed, senior officials of Indian and Chinese companies have been coming to the UAE to recruit people with experience in the real estate sector.


Senior staff with Gulf Co-operation Council experience can command excellent salaries and have become much more selective as to what type of company they would like to work for, Maggi Johnston, executive director, Team One Recruitment, said recently.


“Real estate is tied to the financial sector and so the increase is higher. There is a lot of activity going on in the real estate sector in the region, especially in Saudi Arabia. There is demand for qualified people so the salary levels will go up. There is a growing shortage of talent and this is a global phenomenon,” she added.


Construction costs in the Gulf have risen by around 30 per cent in the past 12 months and new companies are entering regional markets, making the sector even more competitive.


Rising costs remain the major issue for contractors this year, but, unlike previous years, it is the rising price and dwindling supply of manpower, not materials, that is causing concern, according to the Middle East Economic Digest. With one million labour cards issued in the UAE in 2007 alone, previously there has been no shortage of construction workers in the UAE.


However, Dubai contractors increased wages by 20 per cent following a strike in November 2007 at the emirate’s largest contractor, Arabtec Construction.


In addition, there is competition from the labourers’ home countries. The fall in value of the GCC currencies, due to their US dollar peg, has significantly reduced the attractiveness of the region to workers from the Indian Subcontinent.


The Indian Government is expected to spend $500 billion (Dh1.8 trillion) on infrastructure in the next five years. Similarly, in the Gulf, Abu Dhabi has launched $140bn worth of real estate projects since 2005 and Doha and Saudi Arabia are also at early stages of the development cycle.


“We all recognise that we are in a severely labour-constrained construction market. We run a severe risk of continuing to ignore the problem and expecting everything to sort itself out.  In reality, we need to introduce some fresh thinking into our recruitment and retention processes, as well as adopting some new approaches to overcome the continuing shortages,” said Rod Stewart, Regional Managing Director, Hyder Consulting Middle East.


Nakheel Chief Executive Officer Chris O’Donnell, however, believes there is over-reliance on labour and mechanisation could be a solution. “Although you pay more by hourly rate for skilled individuals but you get a lot more productivity and it allows you to use more mechanisation,” he told Emirates Business.



The Number


100% - Salary increase has been given byconstruction companies in Dubai to skilled workers in an effort to retain them