Business | Construction
Job market spurns the real estate tag
In subdued conditions where new job openings are at a premium, professionalsin the property sector have fallen totally out of favour
- By Nicole Walter, Features Editor, Property
- Published: 00:00 October 1, 2009
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- Real estate as a career choice has proved ill-advised for many
- Image Credit: Sue Mae Easton, Designer, Property
Time was when a career in real estate appeared to be the only one that mattered in this town. In those glory days when property-related deals were seemingly brokered by the hour, the commissions were enough to pay for all the trappings of a life in the fast lane.
Porsche? Check.
A three-bedroom duplex in a snazzy tower with views to kill for? Check.
A Hugo Boss or an Armani ensemble? Why not have both? And throw in some Cerruti while we're at it. Those were, indeed, the glory days.
Now, in the more egalitarian present, real estate as a career choice has proved ill-advised for many, more so for those who made a job switch from their established line of work during the market boom. With jobs at a premium, they are finding it difficult - even impossible - to get back to their professions in real estate. They are seen as deserters by their erstwhile employers, who don't want to have anything to do with them.
"Some clients specifically ask us not to send employees who took a ‘real estate break'. Those clients who take this stance see these candidates as high-risk employees," says Mike Hynes, managing partner at Kershaw Leonard, a leading recruitment consultancy. "There are many who left their ‘real' profession to make a quick buck in real estate when they had the chance and now want to go back."
Further undermining a candidate's chances these days is the sheer scale of the odds stacked against them. Kershaw Leonard easily receives 2,000 applications for one position, irrespective of the industry. "Many companies are coping with fewer staff waiting for the downturn to end before re-staffing their businesses," adds Hynes. That, by all indications, is still some way off, further tightening up the job market.
Even for candidates still lucky to get offers, they come with quite a few strings attached. A case in point is the once generous housing allowance clause.
When the cost of renting was ratcheting up until the second half of 2008, many organisations had opted out of providing complete coverage for employee housing costs, instead offering an upfront allowance with any differential being borne by the employee. Now, with landlords more willing to ease up on their one cheque upfront demands, companies are utilising this opportunity as another way to save costs by offering monthly housing allowances as part of the overall package rather than an annual upfront lump sum. "Cashflow is ‘king' now for companies who prefer not to advance a year's rent, but letting employees take care of it via their monthly salary is likely to continue," confirms Hynes.
This is a trend landlords would do well to take note of, and they may do just as well to consider that future tenants are likely to earn less than they were accustomed to. Job seekers have had little luck when demanding more than they earned in their previous position, as companies are reluctant to make compromises. Local experience and knowledge of Arabic are, as always, an even a bigger plus these days to get the job, but not necessarily a higher salary. While clients now insist on professionals with regional experience and proof that they can see through a project from start to finish, they expect them to take a pay cut of 15 to 30 per cent, depending on their skills set.
"Many of our clients now focus more heavily on the reasons behind a candidate's wish to join their organisation, since they have a limited headcount and they cannot afford to take any risks with the openings they have," Hynes says.
Compared with those in real estate, prospects in construction seem to be much better placed due to the continuing emphasis on infrastructure investment across the region, as well as from ongoing projects that were well underway prior to the downturn. Even then, significant downwards pressure on salaries is happening even in this sector.
And it's a fair move, industry observers contend. "Certain consultants have been overpaid - it is healthy to see more of a market equilibrium emerging," says Richard Vaughan, managing partner at VHS International, which specialises in quantity surveying. "Large consultancies in the industry have had to review salaries accordingly. Everyone will ultimately benefit from this. Companies have lost significant projects and really suffered, some quite rightly so. There was a certain arrogance in the market and the fees charged were too high."
Vaughan strongly believes there is still enough work in the market, and cites the instance of his own firm expanding its headcount by snapping up experienced talent that were made redundant by other firms. The skill requirements have also undergone a change to cater to clients demands. There is less demand for project developers, engineering and design managers, and if they do find work, it is with a hefty pay cut. Developers now require expertise in property asset management, health and safety, security, sustainability, auditing and risk management as compared to an earlier preference for planning and development expertise.
"It is all about execution, cashflow and compliance," notes Andrew McNeilis, managing director at Talent Partners International. "Clients are taking risk management and the environment extremely serious now. The salary and package structure has certainly changed, we are reaching something of a pay parity, some firms had overpaid at the top of the frothy market. It seems the dice is all but loaded in the employers' favour.
Salary situation
Qatar:
- Project managers (with ten or more years' experience) can expect to earn 28,000 riyals a month, but down from the 15 per cent during the boom. Projects are restarting, but the market expects more redundancies as others are completed.
Abu Dhabi:
- Design managers are willing to accept Dh40,000 a month, down from Dh55,000, and yet are still not finding work. Project managers used to earn between Dh50,000 to Dh90,000 a month prior to the crisis, but will now have to settle for Dh50,000 to Dh60,000.
Dubai:
- Project managers are taking a 15 to 20 per cent cut, but once the market stabilises salaries could rise again on infrastructure-related jobs.
- Developers have been smashed the hardest with wholesale redundancies," says Andrew Croft, general manager at Talent Partners International in Dubai. "Nine months ago they were getting 30 per cent salary increases plus sign on bonuses, and now they would be taking 35 to 45 per cent less."
(Source: Talent Partners International)
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