Thursday, May 01, 2008

Skills Shortage Hits Financial Services Sector In The Middle East





Skills shortage in the property and construction sectors is known to have caused delays in many projects in the Gulf – but it turns out that the financial services sector is in the same boat, Emirates Business has learned.


Firas Mallah, Dexia Asset Management's Middle East head, citing surveys from a number of headhunters in the region, says the average time a financial services professional stays in one job is seven months.


"This means if you hire finance professionals you're lucky if he or she doesn't leave after the annual bonus," said Bahrain-based Mallah.

"That's an advantage of being based in Bahrain, there is lesser job volatility. The average time span in Bahrain is 18 months against Dubai's seven months."

But even an 18-month retention rate is far below the rates in financial markets in the West, said a source who asked to remain anonymous. He said: "Here in the UAE you will find it a common scenario for a financial services executive to hop through three companies in less than two years."

Wassim Moukahhal, private equity associate at The National Investor, said the financial services sector all around the world had a generally higher attrition level compared to other sectors – but attrition rates in the GCC region were far higher.

"The industry, especially here in the GCC, is definitely having a big issue on retention," he told Emirates Business.

"All financial companies are looking at the same pool of talent, which is scarce. In this part of the world every person who finds a new job gets another offer the next day, and with better pay and benefits. This situation calls for companies to pay higher salaries and this in turn puts a burden on companies."

A recent survey conducted by Bayt.com in conjunction with market research specialists YouGovSiraj showed bankers emerged at the top of the salary scale. In terms of the structuring of total compensation, the banking, finance and retail industries received the highest proportion of variable income in the form of bonuses, commissions and incentives, with 23 per cent of respondents in both industries asserting that this portion of income accounted for more than 21 per cent of total income.

Moukahhal said the attrition rates were due to rapid economic growth and the financial services' "un-preparedness" and instability.

"The market is still not mature so there's a lot of shake-ups all the time," he said. "It's very important for financial institutions to have consistency.

In the case of private equity you really need to have the same team to work for a long time. Clients are used to dealing with a certain team from that company and if that individual leaves then there is a chance for him to just take that guy with him.

"In addition, low retention rates put a company at risk of losing its "know-how" and incurring lower profitability.

Mohammed Benayoune, head coach of the Canada-based Achievement Centre International, said companies lost millions of dollars in revenue through constantly having to replace poached staff. Benayoune said in addition to the sub-prime crisis, the lack of talented leadership was a key factor behind the financial losses. Salaries and benefits were important but they only went so far in resolving the problem. Other companies would follow market trends and raise their salaries and might even offer better benefits.

"In the poaching game, no one benefits," he told Emirates Business. "Research suggests the star employees are the first to be poached by competitors and are less likely to stay. The new stars rarely sustain their performance in the new organisation."

The poaching game, however, is slated to continue as a combination of the falling dollar and the rising cost of living across the GCC leads to unprecedented levels of discontent among regional employees, according to a study released this week.

The bayt.com-YouGovSiraj study has found that across the GCC and sectors, salary hikes were far outstripped by perceived cost of living increases. The disparity was the most pronounced in Qatar, with a perceived average cost of living spike of 38 per cent, 22 per cent higher than salary increases. In Dubai, living expenses have reportedly risen 37 per cent, representing a gap of 20 per cent.

The widening shortfall between salary hikes and the living cost has led many to consider dramatic steps. In Qatar, 50 per cent of respondents said increases in household expenses have led them to plan relocating to another country or returning home.

Oman came second, with 47 per cent, while Kuwait saw the lowest numbers of professionals looking to leave the country, at 32 per cent. In the UAE, 37 per cent had thought about moving abroad.

In the UAE employers are taking the hit of this economic shortfall, with many employees considering job migration to improve finances. Forty per cent of UAE workers said rising expenses might force them to look for a better job in the same sector and 24 per cent said they would consider switching to another industry.
In Saudi Arabia, corresponding figures were 45 and 19 per cent. Only 15 per cent of people in Qatar and 20 per cent in Oman said they would consider changing industries.

Another Pak Lah's Wasteful and Costly Trip to The Middle East?

I read this small report in NST today:

Dewan Rakyat: RM790,000 spent on jets
THE government spent RM792,325.20 for the use of executive jets by Prime Minister Datuk Seri Abdullah Ahmad Badawi and his deputy Datuk Seri Najib Razak between Feb 24 and March 7.


That means during the election campaigning period, both 'caretaker' PM and DPM had abused our money for BN's campaign trips all over the country. They spent RM60,769 per day. Can this be used as a solid evidence for abuse of power?
The opposition should ask the detailed itinerary and purpose on every trip during this period.

Pak Lah is now in Kuwait to attend the fourth World Islamic Economic Forum (WIEF). This WIEF organiser (affiliated to ASLI) is based in Malaysia, web site here. Tun Musa Hitam is the chairman. Never heard of it until today, but all these connections make me smell rats.

WIEF is not a major event and most UAE papers have only mentioned about WIEF as:-

Al Mansouri leads UAE team to Islamic Economic Forum
Staff report

Published: May 01, 2008, 00:45
Dubai: A UAE delegation headed by Sultan Bin Saeed Al Mansouri, Minister of Economy, is participating in the fourth World Islamic Economic Forum, which opened in Kuwait City on Tuesday.
The delegation also includes Khalid Ganem Al Gaith, assistant undersecretary for economic affairs and international cooperation; along with other officials from the Ministry of Economy and various interested parties.


UAE has only sent a Minister of Economy!

According to Bernama:

Abdullah Attends Islamic Economic Forum In Kuwait
From Muin Abdul Majid
KUWAIT CITY, May 1 (Bernama) -- Malaysian Prime Minister Datuk Seri Abdullah Ahmad Badawi arrived here Wednesday night to attend the fourth World Islamic Economic Forum (WIEF).Abdullah will deliver a speech at the WIEF closing ceremony at a leading hotel Thursday.

He will also call on Kuwaiti Prime Minister Sheikh Nasser Mohammad Al-Ahmad Al-Sabah at the Bayan Palace. The Malaysian leader is also scheduled to receive a courtesy call from a special envoy of the Indonesian president, Irman Gusman.

Indonesia will host the fifth edition of WIEF, a forum aimed at enhancing business linkages and investment in the Muslim world, next year.Abdullah will leave for Mecca later in the day to
perform the "umrah" (minor haj).

This is the prime minister's first trip overseas after Malaysia's 12th general election on March 8 which saw the Barisan Nasional coalition returned to power.-- BERNAMA

The 12th Dewan Rakyat's session has started and Pak Lah will be performing umrah with his wife and delegation. Who is paying this umrah trip?

Another UAE paper reports on Malaysia calls for more investment from UAE. Last trip by Pak Lah to UAE was in 2004 as a new PM. How serious is Malaysia in getting investments from UAE?

While going to Kuwait for this lowly event or on the way to or return from umrah, it is better for Pak Lah to fly and meet with UAE's Vice-President and PM, Sheikh Mohammed Al Maktoum in Dubai or meet the President, Sheikh Khalifah himself whom he did not manage to meet during his first (and last) visit.

Read my previous entry The Arabs SKIP Malaysia For Singapore and China for better understanding why Pak Lah should be here than Kuwait or Makkah.
Malaysia calls for more investment from UAE

Malaysia's trade commissioner in Dubai has said investment and trade with the UAE has grown – especially in Malaysia's real estate sector – and he called for more investment in the country's private sector.
Noraslan Hadi Abdul Kadir, trade commissioner at the consulate, said the majority of the investment from the Gulf has been in the country's Johor state.
Real estate purchases, he added, make up the bulk of the capital in-flow and have picked up since the launch of the "Malaysia my second home" initiative, which allows foreign nationals to buy property. Owners are then extended a renewable 10-year visa. Since its launch in 1996, the "Malaysia my second home" programme has attracted more than 10,000 foreign buyers.
Abdul Kadir also provided a general overview of trade between the two nations. The UAE is currently Malaysia's biggest commercial partner in Western Asia and its 17th largest overall. Meanwhile, Malaysia is the 10th largest exporter to the UAE.
Products topping the export list to the UAE in 2007 from Malaysia included jewellery (Dh3.645 billion), palm oil (Dh948 million), timber (Dh769.2m) and electronic appliances (Dh561.5m).
The same year, Malaysia imported crude oil (Dh2.53bn), refined oil products (Dh1.02bn), metal industries (Dh519m) and chemicals (Dh147.8m) from the UAE. With the GCC as a whole, commercial trade in 2006 grew by 31 per cent, compared to just 3.6 per cent in 2005.
And by the end of August 2008, four GCC investment companies – Kuwaiti Finance House, Mubadala Development, Al Dar Properties and Millennium International Development Company – have said they will invest $2.2bn (Dh8bn) in a project in Johor state.

The Rakyat Will Be Watching, closely!



After 50 years of merdeka, there was hope of fresh air in the parliament on the first session. However, reading from the report on the first day itself seems like old bad habits hard to die.

We have seasoned opposition MPs like Karpal, Lim Kit Siang or those from BN who should either show more qualities in debating or just shut up and be good backbenchers. According to the Star, sparks flew when the new Parliament session opened yesterday with MPs shouting, bickering and calling each other names live on television with the Speaker having a tough time controlling the House.

We do not want precious time wasted and I kind of agree with the Speaker that all trivial and technical issues can be put aside for more worthy debate and QA sessions. MPs to behave like “gentlemen and ladies” and get down to serious matters.

Well, the rakyat is watching, either through live telecast or reading from reports (some MPs update their blogs from the Dewan itself) which will not augur well for democracy. Focus on urgent and critical issues and let's the rakyat voices be heard, the Rakyat is sovereign!

It was a good article from The Edge:-
Putting the Rakyat back into the Dewan

For the first time in Malaysia’s history, we now have a parliament that is not heavily balanced to one side of the aisle. With the balance of seats in the Dewan Rakyat at 140 for the Barisan Nasional (BN) ruling coalition and 82 for the opposition Pakatan Rakyat (PR), and given the woeful attendance record of previous elected government representatives unless whipped, the utterly optimistic among us may have reason to hope that things will only get better.
We hope the Dewan Rakyat will come to be what it is supposed to be: the forum for informed and meaningful debate rather than a half-empty chamber where vulgar and racist noises are amplified.
Hope, however, can all too often become the poor cousin of reality. Before considering the fortunes of either cousin, perhaps we should remind ourselves of the raison d’etre of a parliamentary system of government: the Rakyat is sovereign. Any MP, regardless of his or her position in the government; as part of the backbenchers or the opposition, is there in parliament to serve the Rakyat and the country.
It is also parliament that scrutinises the performance of the country’s upper management, its executive branch, which has decision-making power over so many aspects of our lives, present and future. The separation of the legislative, executive and judicial branches of government prevents the concentration of power in any one branch, allowing each to perform the crucial role of checks and balances on each other to uphold public interest.
What then is the record of the Malaysian parliament in scrutinising laws and policies in the public interest? Some statistics make for grim reading. In one survey of government bills introduced for reading in parliament from 1991 to 1995, Professor Dr Shad Saleem Faruqi, the constitutional law scholar, estimates that 80% was eventually passed into law. Only a mere 5% was amended. (15% was withdrawn for various reasons.)
That this is the case is not surprising. The BN’s historical two-thirds dominance of the Dewan Rakyat meant that its MPs have tended to vote along the corporate or party line set by the BN leadership. Their failure of individual, rational agency for dissent in far-reaching matters of public interest continues to have its consequences for us all.
In 1988, for
example, in the aftermath of the removal and suspension of the Lord President and five judges of the Supreme Court, Article 121 of the Federal Constitution was amended by the Dewan Rakyat in a single sitting, with the requisite two-thirds majority easily reached. The effect of this amendment was to render the judiciary formally inferior to the executive branch of government. The constitution was used as an instrument by parliament and the executive to legitimise the emasculation of the judiciary. The rule of law was turned into rule by law.
Sadly, in the final reckoning of electoral politics, abstract concepts such as the rule of law and constitutionalism are a hard sell to the voting public — until the rot has well and truly set in, it would seem. What matters now is that parliament, as a legislative body and democratic institution, once again proceeds from ideals and principles rather than expedience.
More mundanely but equally crucially, the speaker, as head of parliament, must discharge his duties as an impartial arbiter of its proceedings, granting equal access to government and opposition MPs to time (for questions, to read bills) and to resources.
With that, we say let the debate begin. Let it be vigorous but civil. Let the 12th parliament, formally opened yesterday by King Tuanku Mizan Zainal Abidin, be an inspiringly different one.
The Rakyat will be watching.