GCC construction firms need liquidity, pronto
Certain aspects of Construction Week’s 2016 Salary Survey make for uncomfortable reading, and liquidity appears to be the root cause of many of the problems being faced
The results of Construction Week’s 2016 Salary Survey have been compiled, and it saddens me to say that they don’t paint a particularly healthy picture of our industry (page 20). The findings of last year’s survey (‘The big freeze’, CW 590) were not altogether encouraging, and certain negative trends appear to have worsened during the past 12 months.
One of the most concerning findings is a year-on-year rise in the prevalence of salary disruptions. In 2015, the percentage of respondents who reported having experienced salary delays during the preceding 12-month period stood at 13.5%. Among 2016’s respondents, this proportion has seen an almost twofold increase, with 22.7% of participants having faced delays during the past 12 months.
Any salary disruption is significant to the affected individual, and it’s important to note that a broad spectrum of delays were reported by this year’s participants. While the lowest involved periods of less than a week, the top-end outliers reported delays of up to an entire year.
For many of our readers, the news that salary disruptions have become more common will not come as a complete surprise. CW has covered a number of instances of salary non-payment in 2016.
Few would deny that low market liquidity is causing genuine challenges at a corporate level, but equally real are its effects on the attitudes and intentions of the regional workforce. Not only is the current economic climate causing construction professionals to perceive their circumstances more negatively, but it is also motivating them to pursue alternative employment opportunities.
Despite 60% of last year’s respondents reporting that their salaries had either remained the same or fallen during the preceding 12-month period, 71% anticipated a pay rise within the following year. In reality, the proportion of 2016 participants whose pay has been frozen or reduced has grown, and optimism has fallen accordingly. Just 44.4% of 2016’s respondents expect their salaries to increase during the coming year. What’s more, 52% of this year’s cohort expect to change jobs within the next 12 months.
Of course, the employers of those who have suffered salary disruptions are not delaying payments due to a lack of inclination, and solutions seem few and far between. Nevertheless, a variety of positive market trends – including governments’ payment of monies owed, the early involvement of dispute resolution specialists, and a growing interest in alternative methods of project finance – could serve to alleviate some of the aforementioned financial pressures.
Unfortunately, this doesn’t change the fact that if firms are to retain their existing talent pools – and dissuade dissatisfied employees from moving elsewhere – they need to come up with innovative ways to make good on their historic promises, and start delivering results.