Too many people

The 2004 ACN Employment and Training Survey shows that competition for tech jobs is high in the Middle East as workers have flocked to the region after losing their jobs elsewhere.

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By  Patrick Phelvin Published  January 25, 2004

|~|emp_M.jpg|~|A surplus of skilled IT professionals is creating a huge amount of competition in the Middle East IT marketplace.|~|While the effects of the worldwide tech slowdown had negligible direct impact on many companies in the Middle East, the indirect consequences of mass layoffs abroad meant that a large itinerant workforce of skilled IT workers flooded onto the global market. Many looked to the Middle East, with its growing oil revenues and economic stability, for work. A surplus of trained IT staff in the Middle East has kept pressure on wages, encouraged technology sector staff to stay in their jobs for longer and enabled companies to become increasingly choosy about who they employ. A number of factors have contributed to this situation, including forced redundancies across the tech sector in Europe and the US and the perception that the Middle East has a plentiful supply of jobs. However, in reality, the region is groaning under the weight of a vast number of semi-skilled IT technicians, a fact that the results of the 2004 ACN Employment and Training Survey lays testament to. “A slowdown worldwide brought a lot of trained labour back to the region. All of the IT people from India who lost their jobs in the US, Europe and other regions either went home or tried to find proximity locations nearby and the Gulf area is where they looked first. This is why there is huge demand for jobs in the IT market. It is a reflection on what happened worldwide,” says Akram Assaf, chief technology officer (CTO) of online recruitment firm Bayt.com. In addition to this influx of technical personnel, there is a general restlessness among IT workers already employed here. The survey demonstrates that these people are working longer hours than last year. Little training and poor prospects are prompting nearly a third of the 158 tech workers who took part in the survey to respond that they hoped to find new employment within the next 12 months. These factors mean the job market is saturated with potential candidates. Microsoft South Gulf now receives 500 job applications per week, while Bayt.com regularly has up to 3000 applicants for each IT position it offers. Elsewhere, once the specialist IT team at recruitment consultant Clarendon Parker has filtered through unsuitable applicants, they can still have as many as 300 candidates for a single position. Such a situation means the Middle East tech sector is an employers’ market, and while such a disparity between the number of vacant positions and the number of applicants exists, companies here will be under little pressure to improve pay and conditions and implement training programmes. ||**||Demographics|~|training.jpg|~|Arabisation programmes are taking effect in the Middle East.|~|2003 was the year that tech workers came to the Middle East. For many, it was a delayed reaction to the burst of the dotcom bubble as they found it increasingly hard to replace the jobs that disappeared with the downsizing and collapse of tech companies. The growing tendency of companies to offshore IT projects to countries like India, where skills are cheap and plentiful, exacerbated this trend. The Middle East, with a number of developing government and private sector IT projects in the pipeline, attracted many of these workers with its stable market and wages, which, when compared to the likes of India, still seem high. This growth of the number of jobseekers has increased at every level and those further up the chain of command are just as vulnerable to global change. “There is a perception among technology companies that they know all the people suitable for a senior position. That is not the case. In fact, the market at that end is saturated with many capable people,” says Ewan Walton, consulting services manager for ITP Consulting. On a positive note, many workers who are originally from the Middle East have chosen to return as the local market becomes more viable and exciting. The number of GCC nationals working in the tech sector increased from 11% last year to 15% this year. “The interesting thing is that we have a large amount of applications from Arabs in the West,” says Fazal Khan, HR manager at Microsoft South Gulf. “They believe there are huge opportunities in the Middle East now. It is a viable option for them and culturally they want their families to be back to their roots. Sometimes I ask potential candidates why they want to come back and they say their kids are growing up and they want them to be aligned with Middle Eastern values and culture, or [they say] they want to move back home because they can do as well here as they can in the US,” he adds. Regardless of nationalisation laws, which have been brought in by Middle East governments to boost the number of local people working in the region’s companies, businesses here are actively seeking out Arabic staff for management positions. Walton says this trend permeates to the top of the market. “The reliance on Western staff at [CTO and CIO] level is not what it once was. In many ways staff from the Middle East are more capable than their western counterparts. They have the added advantage of cultural and Arabic language skills which are so important here. An increasing number have the business know-how as well,” he adds. The number of women employed in the Middle East’s IT sector also appears to have increased, 17% of respondents to the 2004 ACN Employment & Training Survey were female, up from 11% last year. This indicates that the number of women in tech roles here is on a par, or even better than some western countries. Out of six account managers recruited by Microsoft South Gulf in the last 12 months, four have been women. “Of late I have started to see more female resumes come in. As a company we have a strong focus on diversity and we would like to see more females apply. The way we look at it is that we need diversity,” adds Khan. The tech sector in the region is also remarkably young, with 56% of survey respondents in the 20 to 30 age group. While there would appear to be a larger technically proficient workforce in the Middle East than ever before, more than half (52%) of participants polled by the 2004 ACN survey said they were working more hours this year than last, the second year-on-year rise in working hours. This trend can be attributed to companies getting leaner and meaner as competition hots up and budgets are trimmed. “The market now is a real market, in the IT world the bubble burst here just as it did in the rest of the world, I think that the big margins that have traditionally been seen in the Middle East are no longer seen here. Clients are very bottom-line driven and the market is now quite tight and fiercely competitive,” says Theresa Carew, senior recruitment consultant, IT and telecommunications, Clarendon Parker. This competitive edge has crept into the region along with an increase in the number of companies that are competing for the same business. The resulting cutbacks have resulted in IT staff working longer hours, often for the same money. “The first thing I have to do with a jobseeker is re-align their salary expectations to be realistic,” says Carew. “Salaries are going down. The market is becoming real. The days of those big ex-pat salaries are largely finished. There are still people sitting in the vendor market earning huge salaries, but a lot of these would like to leave and are staying simply because they cannot match their salary expectations elsewhere,” she adds. In a related trend, vendors appear to be recruiting from other markets, as the status of working for a large vendor means technical personnel are willing to work for less in return for added stability and kudos. Nearly 80% of respondents to the ACN survey said working for a more reputable employer would be their main reason for shifting jobs. “These new multinational [vendors] are not taking on people from the vendor market, they are taking them from the reseller market because those in the reseller market are dying to get into the vendor market and will work for less,” says Carew. Although financial packages for some senior roles seem to be increasing slightly, the majority of the workforce (69%) remains less than satisfied with what it is paid. These relatively low wages and long hours is one factor contibuting to the Middle East IT market’s very high rate of staff turnover. Only 11% of those polled saw themselves changing job in more than five years’ time while the majority (61%) see themselves leaving their current position in under two years. Added to this, despite corporate talk of retaining an increasing number of staff with fixed-term contracts, the 2004 ACN survey shows there are 15% fewer staff on such terms this year than in 2003. Many long-term contracts seem to have been forsaken in favour of arrangements that allow companies to maintain a more flexible workforce. While this is all well and good for corporations looking to run efficient operations, such a trend does not encourage a stable labour market. In addition, because of low pay, staff are all to eager to trade in their jobs for a few extra dollars a month. More than 70% say more money would motivate them to change job, a situation that in the long term could damage their careers, according to Carew. ||**||Pay and conditions|~|woman.jpg|~|There are more women working in the Middle East's tech sector than there were last year.|~|“People here will move for an extra Dhs100 (US$27) per month. For the cost of living these people are underpaid so you can’t blame them for wanting to move but when it comes to [applying for] a more senior position [in the future] clients may say an applicant will have moved too much,” she says. However, at the high end of the market, this short-termism has not made a significant impact as companies are eager to reap the benefits of retaining senior staff for extended periods of time. “Businesses need long-term stability as much as their employees at a strategic level. They want to know that their CTOs and CIOs are going to remain in place for a reasonable amount of time. As such, we see few short-term contracts at this level,” explains Walton. Despite the flood of workers into the market, a select few can still command the wages and benefits they desire and competition between companies to recruit the cream of the crop is still high. Supporting this trend is the fact that that despite the huge number of applicants to web sites like Bayt.com, 50% of those surveyed by ACN found their current employment after being approached by an employer. “There are individuals who have proven capabilities or a track record in the market who are in high demand. You will sometimes find five companies chasing the same people,” says Khan. For the second year running, the ACN survey reports that on-the-job training remains a low priority for many companies — 43% of respondents received no training at all in the last 12 months. Many employers are unwilling to invest staff time and their money in such schemes, despite the fact that 41% of employees said the prospect of better training would prompt them to move job, meaning these businesses are running the risk of losing experienced staff for the sake of a few dollars spent on training. More than 60% of survey respondents said they wanted more technical training this year and a significant number of IT workers (44%) say they want training in business and managerial skills over the next 12 months. Such skills will be increasingly valuable as leaner IT departments require technical staff that can also manage budgets. Fortunately, the Middle East’s IT workforce remains remarkably well educated, with 60% boasting degrees and the vast majority of technicians possessing industry certifications from at least one vendor. Khan puts this down to employees’ awareness of the importance of developing their own tech skills. “In the technical world there is a huge push towards self learning, you have people reading white papers of their own accord, clearing their certifications and trying to develop new skills that may not be in use in their current jobs but prepare them for the future. These are the ones in the top 20%, who want to advance and want to get on,” he says. The problem, from a workforce point of view, is that there is such a proliferation of base-level vendor certifications that it has reduced their value in the eyes of employers. Certifications have become a must-have asset rather than a tool that can be used to leverage a more generous wage packet. While employers can pick and choose the most qualified person for a particular position, on-the-job experience is the vital commodity that employers are looking for. “Certification gives me a level of comfort that the individual has basic skills in place,” says Khan. “Then I look at the extent at which they have been able to apply them. We have just hired people who have not completed their certifications. These people have worked extensively in a relevant area of technology and have proved they have the skills and know-how — for us that is important. At the end of the day we are looking for people who can get the job done,” he adds. Assaf agrees: “Certification was a strong trend in the 1990s and early 2000s and most IT people will now be certified in one way or the other. But the value of these certifications is not as strong as it used to be. Employers are more picky now, they look closely at what kind of experience an applicant has had during previous employment,” he says. Despite the fact that there are a large number of candidates for a limited number of jobs, and the days of megabucks for tech skills are gone, there are some encouraging signs that the economic outlook in the Middle East is brightening. There are a number of new projects and therefore associated positions on the horizon. “The number of jobs is picking up. The market here is being helped along by the high oil prices. The only problem is that the number of jobseekers is still going to remain high,” says Assaf. This year there are likely to be fewer jobs on large-scale enterprise resource planning (ERP) projects than there have been in recent times. Instead, the demand for employees with a proven track record in deploying and managing customer relationship management (CRM) applications and web-based apps is growing extensively, as is the market for those workers with harder-to-obtain certifications such as Cisco’s CCIE. “We are seeing a lot of movement in the end user market, that generally means it’s going to be a good year for [recruitment in] the vendor market,” says Carew. “Last year the market seemed to have stagnated for a year or two. But this year it’going to pick up. However, this is not the market of pre-2000 — it’s much more realistic,” she adds. Walton agrees: “I think in Q1 [of 2004] we are going to see an increase in employment opportunities at mid and senior level as companies sort out their financial planning. In Q2 we are going to see a bit of a boom and in Q3 we will be very busy,” he predicts. ||**||

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