Recruitment results

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(Simon Cobon/ITP)

The supply chain and logistics industry continues to suffer from a skill shortage throughout the Middle East, with companies struggling to attract talented personnel to the region. Logistics Recruitment highlights some of the issues facing Middle East employers and how they might be resolved.

Although a skills shortage is apparent in the Middle East logistics industry, the problem actually spreads much further afield, with companies throughout the world struggling to recruit experienced and qualified supply chain professionals.

A recent market survey, conducted by Logistics Recruitment, highlights this scenario and provides a stark warning to employers on taking necessary measures to overcome the crisis.

"On a global scale, the logistics industry is competing for a limited talent pool and geographic boundaries are becoming less defined," explains Kim Winter, group managing director of Logistics Recruitment Worldwide. "This underlines the necessity for logistics companies to provide innovation and flexibility in salaries, remuneration packages and the work environment."

The Middle East has emerged as a particularly challenging market for employers, as the region's unprecedented growth has outstripped the supply of labour. In total, 90.27% of respondents in the Middle East indicated that business activities and growth had increased in the last year, while 88.53% predicted this will continue further in the next 12 months.

With little sign of the market slowing down, logistics companies will have to increase staff levels to support the expansion, although Nigel Moore, Logistics Recruitment's managing director for the Middle East and Africa, is sceptical about companies being able to achieve this due to the current high inflation levels.

"The Middle East is no longer the honeypot it once was for expatriate staff," he emphasises. "Without doubt, the region provides an exciting and challenging work environment and a good standard of living. However, the traditional strategy of providing excellent savings potential for employees no longer rings true."

Running parallel to the increasing cost of living, the Middle East has also experienced stronger competition from other countries for qualified logisticians. In particular, China, India and South East Asia are offering viable alternatives for employees.

"India will have a huge requirement for supply chain and logistics talent in the coming five years and with rising salaries in that market we are already seeing many Indian nationals returning home for better prospects," explains Moore.

The world is fast becoming more mobile, and the survey is proof of employees' desire to relocate. 68.42% of Middle Eastern respondents indicated that they have relocated internationally due to their careers and 89.57% said they would consider relocation in the future.

There is thus a high risk of the region losing many of its staff to neighbours. According to the poll, 88.35% say cash would be a motivator to move, while 73.79% would change for career development opportunities, and 66.99% would relocate due to better living costs.

As a result of the rapid growth in the economy, living expenses in the emirates are increasing and this can act as a major deterrent for overseas candidates looking to relocate. Furthermore, inflation puts pressure on companies to increase salaries accordingly, which can be detrimental to a company's margins.

Regarding regional salaries, 47.73% of employees received a pay increase of more than 8% at their last salary review and 49.01% believe they will receive more than an 8% increase at their next review.

Although these numbers are reasonably encouraging, it is not just salaries and inflation that are affecting recruitment; the weak US economy is also a contributing factor to people's employment decisions. By pegging the dollar against the GCC currency, concerns have arisen over the value of these salary increases.

For example, 52.81% believe that currency exchange variation has had a negative impact on their business in the last 12 months. However, 47.37% believe that interest rates have had no such effect. While economic instability is a factor, it does not currently seem to be critical. More pressing are the rising costs.

"Gulf economies are experiencing inflation, which has eroded most employees' ability to save," Moore says.

Nevertheless, although the region is becoming more expensive, it still has its own unique incentives, such as quality of housing, enjoyable weather and lifestyle, affordable private schooling, and, obviously, it is still tax free.

But regardless of this, the region is still experiencing a shortage of staff, not only because of the increase in demand for expatriate workers, but also because of limited local talent in the industry.

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