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Thu 1 Nov 2007 04:00 AM

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On the brink of a mass exodus?

Poor wages and the high cost of living in the UAE are driving many expatriates home, making recruitment one of the biggest challenges facing the industry. ATN asks why it has come to this.

Recruiting and retaining skilled members of staff has become one of the most serious issues affecting travel agencies in the UAE, ATN can reveal.

New apartments are being filled as soon as they are complete throughout the region, forcing house prices higher and higher, and economies in Asia and the Indian Subcontinent, the main source markets for recruitment in the travel trade, continue to boom.

Paying peanuts and getting monkeys is a worldwide problem in the industry to be honest.

In addition, rising inflation in the Middle East, coupled with a collapse in the value of Gulf currencies against the Rupee is having a crippling effect on remittances to India; the main reason expatriates choose to work in the region in the first place.

The result is that people are more hesitant to leave their homes and families behind to come to a place where the cost of living far outweighs the increased salaries and zero-tax environment that workers find in this part of the world.

Consequentially, skilled workers that can earn a good wage in India tend to remain at home rather than travel abroad to pursue their careers, leaving the pool of new recruits willing to come to the Gulf bereft of any skilled or experienced workers.

For travel agencies, this means that although the barrel will never run dry, the quality of new staff may diminish.

"Paying peanuts and getting monkeys is a worldwide problem in the industry to be honest," said John Flower, product manager, Alpha Holidays.

"The sad fact is that there is no need for that given that there are people making a hell of a lot of money in this game."

Flower condemned the excuse that senior travel personnel often use to justify low salaries: ‘the margins are so low - that's why the wages are so low'.

"To maximise profits companies bring in unskilled workers, pay them a pittance and expect them to perform like the professionals in the big wide world - very unfair - then the vicious circle begins; they get into debt, they get trapped and they are stuck here at the whim of their employer," he said.

But Flower was quick to highlight that larger travel agencies, such as Alpha Tours, avoided this practice and valued its employees.

"In return it is getting substantial growth, happy staff, and most importantly loyalty," he added.

One option for larger agencies is to try to outdo the competition and poach experienced members of staff from smaller agencies by offering more competitive salaries and ultimately greater job security.

"We are trying to pick up staff from the local market within the UAE as they have the experience of the local market," said Fabian Fernandes, general manager, Alpha Travel and Holidays.

"If not from Dubai we look to the other emirates because it is easier to compete with the salaries and easier to get them to join us. It's difficult to match the salaries in India now; people don't want to come here."

This presents another problem for agencies. If counter staff do not have the incentives to stay with their company - career advancement opportunities and the prospect of pay rises or sales-based bonuses - they will be inclined to move to another agency, even if the difference in pay is minimal.

"Working on the graveyard shift and the long working hours are some of the most common complaints for travel agents," said Tawanda Kaseke, recruitment coordinator, HR department, Al Rostamani Group.

"Surprisingly some people move even when their salary is to increase by a fairly insignificant amount."

High staff turnover means a lack of expertise within the workforce and therefore poor customer service.

Since the problem shows no sigh of letting up, agencies must decide what is more important and cost effective to them - constantly recruiting new staff for lower wages and risking losing them to higher paid jobs, or trying to ensure that they retain the staff they have by offering them a reason to stay with the company and earning their loyalty.

Orient Travel general manager Asim Arshad said his company had witnessed staff leaving Dubai to return to India and Pakistan and to nip this problem in the bud the management team had implemented some meaningful incentives.

"The biggest increase in costs today is not real estate; it's loss of people. Our percentage cost for the pay role has increased a lot," he told ATN.

"We have given benefits other than salaries. We have started providing transport for our staff to take them to work. It saves them money and they also arrive less stressed."
Orient Travel introduced the transportation service several months ago to make life easier for employees who often live in another part of town, or even another emirate to their place of work, he added.

"We had to put a lot of logistics into it because we have people working in Jebel Ali who live in Sharjah and vice versa! We are also looking at providing accommodation. We want to work something out so our staff don't worry about paying high rents."

Indian companies are coming to Dubai to recruit people to take back to India to work now. I think eventually the profile of staff in the service industry will change.

This would apply to frontline staff and not management as it was the lower salary brackets that were most badly affected by the high cost of living, he added.

According to Hans Haensel, senior vice president Emirates destination and leisure management division, the traditional Asian source markets are drying up and new ones have to be tapped.

"Indian companies are coming to Dubai to recruit people to take back to India to work now," he explained.

"I think eventually the profile of staff in the service industry will change."

According to Haensel, Brazil is one of the new untapped markets for hospitality recruits that the Emirates Group is now exploring.

"We do have a recruitment drive in Brazil," he said.

"Hospitality staff in Brazil get a low salary and no accommodation - at least in the Gulf hotel staff get accommodation as part of the package, even if the cost of living is high."

But career progression and the chance to move on must also be part of the package, he added.

Haensel acknowledged that the language issues were a barrier, but said that Emirates would provide language training where necessary.

Booming Asian economies are not only affecting the travel and tourism industries abroad - domestic markets in Southeast Asia are also feeling the effects of a lack in supply of skilled workers.

"We have identified the human resource crunch as the next huge issue," said Peter de Jong, president and CEO, Pacific Asia Travel Association (PATA).

"Our hardware is increasing much faster than our software is being developed. Our training institutions aren't churning them out fast enough and when they are churned out they may be poached to another destination that offers them a better deal."

Unlike Asia, the Gulf does not have a homegrown workforce, but some local institutions are doing their best to change that.

Emirates Academy project manager Sarah Shaw said that 600 Emiratis have qualified from hospitality training courses and gone on to find employment in hotels since the project was launched in 2002, but that still only represents a fraction of the industry.

"The hospitality industry is still a little bit taboo but we are trying to change the way people perceive it," she said.

"Graduates join the hotels at entry level but they can then go into all kinds of fields, like accounting, F&B or engineering. The wealth of career opportunities is huge - whatever you love you can do."

The Academy would consider introducing travel trade training in the future, she added.

InterContinental Festival CityIntercontinental Dubai Festival City, which is set to open its doors any day now, had employed some 840 staff by the middle of October, with bus loads of new recruits arriving daily.

The 840 staff came from 45 different countries following extensive recruitment drives in 18 countries, in-house and external advertising, the online recruitment site - www.careers.ichotelsgroup.com/ - and agency recruitment.

"We received around 10,000 CVs, we interviewed around 5000 people, short listed around 3000 and selected around 1280 in total," explained Angel Magdalani, director of human resources at the hotel.

"We don't throw CVs away. The active ones we share with our sister hotels in this part of the world and we save all the others for six months in case an opportunity arises."

According to Magdalani, the top five source markets for new recruits are India, Philippines, Sri Lanka, China and Indonesia.

So how did the hotel manage to attract so many new recruits despite the low wages and high cost of living in Dubai?

Magdalani described some of the other incentives that attracted staff to the hotel, in lieu of high salaries: "We provide staff accommodation, three meals a day, transportation, medical insurance, airline tickets, we do sports and social activities, national day celebrations and so on," she said.

"All the benefits add up to one and a half or two times what the salary is. Its tax-free and then they get a percentage of the service charge when the hotel starts running."

The hotel's executive committee also shares regular financial reports and other statistics with staff at all levels, which helps to make them feel that they are part of the bigger picture, whatever their role, she added.

But despite the success, Magdalani conceded that recruitment had gotten harder in the last 10 years: "Some source markets have seen the economies improve, like in India. It was easy to find Indian employees before but not so much now," she said.

"Hotels are going up by the day, so there isn't enough talent to fill the positions in all those hotels.

"Now the hard work really starts in retaining them; retention is more difficult than hiring. The more you give them in training and developing them makes a big difference. Making sure that staff are happy is the key to retention."

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