Demand for qualified property professionals in places such as Dubai has soared but be realistic in your financial expectations, says Peter Moore
An increasing number of employers, not just in property but also further afield, are continuing to report severe shortages of good-quality experienced professional staff. So is the UK losing its finest professionals to the world’s tiger economies?
In the latest available World Bank study into international migration, undertaken at the end of 2005, the UK was cited as losing more skilled workers to the global brain drain than any other country.
More than 1.44 million graduates left the UK in 2005 to look for more highly paid jobs in countries such as the US, Canada and Australia. That far outweighs the 1.26 million migrant graduates in the UK, leaving a net brain loss of around 200,000. There is much evidence that this trend has continued since the report was published.
The UK lost 16.7%, or one in six graduates. This figure is much higher than in any other industrialised nation. By contrast, France has lost just 3.4% of its graduates, the lowest level of any large country. The problem is exacerbated by the relatively low level of postgraduate education in the UK, which means that the exodus of professionals is more keenly felt.
Taking the property profession as an example, the opportunities for chartered surveyors to work outside the UK have increased substantially over the past two years or so. The advances in IT, communications and affordable business travel have all contributed to the globalisation of the property advisory and investment market. The most buoyant economic climate since 1996 has stimulated huge expansion internationally.
The world leaders in property advisory work have expanded to service the now global property market that was in times past focused regionally. There is no doubt that the UK’s chartered surveyors lead the world when it comes to property not only are we well trained and well regulated, but we speak English. History has dealt us a good hand:
we speak the international language of business. Wherever in the world English is spoken in tandem with the local language, we can operate.
Optimism for those working outside the UK is high. The 2006 RICS and Macdonald & Company salary survey (Property Week, 23.02.07) showed that 65% of the participants expected an increase in economic activity outside the UK up 4% on 2005 compared with 48% expecting a rise in the UK up 3%.
Optimism is highly focused upon African markets (78%), the Middle East and Asia (73%) and continental Europe (67%). The two markets that have the greatest pull on quality UK professionals at the moment are the Middle East and Asia. Europe is difficult for the UK-qualified surveyor as languages have never been our strong point.
Research shows that 18% of property professionals would leave their employer to work in a different country, a figure that has grown by 2% since 2004. This trend is expected to continue to rise.
At Macdonald & Company’s Middle East office in Dubai, demand for qualified experienced professionals has increased tenfold in the past 12 months. Salaries in the Middle East have risen by 15% in the past 12 months, compared with an average of 5%-6% elsewhere, except China.
Dubai is a unique market in many respects. Investment into Dubai and other Arab states has created an unprecedented demand for a broad range of skills. This demand has increased as projects rise from the ground and completion dates loom and pass.
There is no doubt the UK is losing talent to the region, particularly at senior level, as we all know it is a fine place for those who dislike rain, cold and tax. The population of Dubai is around 1.62 million and is conservatively projected to grow to 3.5 million within the next three years. That is an increase of about 600,000 people a year, 80% of whom will be expatriates, many from the UK.
Most property companies will have a mixture of UK and local staff running the firm, but most technical staff will be local, as they have the necessary skills and qualifications to do these jobs. Expats will only be employed if a specific skill or qualification cannot be sourced from the local market.
The reasons for working overseas are many: lifestyle, tax mitigation, professional experience and so on. However much salaries have moved forward compared with the UK, Macdonald & Company finds it imperative to manage candidate expectations. There has traditionally been the view that working outside the UK results in all cases in a substantial uplift in remuneration. This is certainly the case with ‘hardship postings’, such as those in Saudi Arabia. But these are now becoming rarer.
Most employment in the developed markets of Dubai, Abu Dhabi and other Arab states commands remuneration packages that are equivalent to the UK, but not greater. Accommodation costs are increasing monthly and the municipality of Dubai has recently imposed a rental increase cap of 7% to curb the recent stratospheric rises. This rental increase accounts for most of the salary rises in the region over the past 12 months.
Salaries and packages offered to employees outside the UK have changed considerably in the past 10 years. It has now become relatively standard among employers in the Middle East and the Caribbean, for example, to offer all-inclusive salaries rather than packages which offer a basic salary, plus accommodation, transport and schooling.
The main reason for this change is that most locations are not deemed to be ‘developing’ that is, they no longer lack amenities similar to that of the UK. Therefore, companies no longer have to entice property professionals to be based there with ‘hardship’ packages.
Research shows that the average salary among international property professionals is not only higher those that of their UK counterparts, but is also increasing at a faster rate. Professionals working outside the UK have enjoyed an above-average 7.5% increase, compared with 5.2% in the UK . The average salary outside the UK is also greater, at £57,484, which is 32% higher than the UK average. The average salary in the UK is £43,532 which is only a 5.2% increase since last year.
Bonuses attained by those working outside the UK are also far in advance of all other locations (see graph 2). Most of these increases are in direct proportion to the increases in the cost of living in these countries.
Certain sectors have been slower and less inclined to employ non-UK professionals. A typical reason would be the lack of UK experience. Professionals, particularly those from abroad, often possess valuable experience that can be useful in the UK.
A small number of employers are becoming more open to applications from non-UK staff, but there are many who are missing out.
Peter Moore is managing director of property recruitment specialist Macdonald & Company