Interesting dynamics at play in local job market | Joanne Bondin

MISCO’s Salaries & Benefits Report has become a milestone publication for the local business sector. Why?

The fact that our report is published annually, gives it an important element of consistency so it is viewed by employers as the reference report on employee compensation research in Malta. This survey, the result of a four-month long research exercise, provides a reliable, realistic, and up-to-date picture of the remuneration packages paid in the local market so it is the ideal tool for companies to ensure that their reward strategy is in line with their positioning in the market and with what the market is offering to attract, retain and motivate employees.

What does it make this survey sought after?

Apart from providing information on salaries and related benefits, this report also includes an analysis of recent developments in Malta’s economy. However, the survey is also sought after because it also includes the results of an annual survey on HR developments in Malta. This survey, now in its nineth edition, analyses the development of the HR function in Malta and provides an understanding of the key HR issues that companies are facing. This survey was also undertaken in collaboration with the Malta Employers Association which allowed us to expand the survey further to deliver enhanced and more comprehensive results related to the employment of individuals and the developments and challenges faced by individuals who manage the HR function in various organisations in Malta.

How extensive is the report?

The Salaries and Benefits Report covers a total of 131 positions covering job categories which include management, executive, clerical and technical roles. This year’s edition includes four new positions and the alignment of certain job roles to reflect the dynamics and the changes going on in the Maltese labour market.

What struck you most in this survey?

One of the aspects that struck me most was that while one would expect companies to cut down on expenses and recruiting, as a result of the volatility of the market, every sector is still experiencing the lack of available talent. This shortage has made organisations increase salary packages, offer more benefits, and go to extraordinary lengths to offer flexibility, which in turn is bolstering inflation. Another interesting aspect that we noticed was the increase in job mobility which has given companies the opportunity to restructure their organizations, giving new or promoted employees a redesigned role at a lower package than the one given to previous role holders.

You refer to the trend of ‘job hoarding’ which seems to have picked up.

Although we are experiencing a surging inflation and there is a looming cloud of an oncoming, feared recession, unemployment has stayed low in Malta and organisations have continued to engage workers, often paying higher wages. In fact, in our meetings with employers, we increasingly started noticing an element of job hoarding taking place which means that employers are keeping in employment persons who may not be needed or may not have the required skills for the position they occupy. This shows the extent to which talent has become hard to find.

What were the main findings of this year’s Salaries & Benefits report?

In the past 12 months, the average increase in total remuneration packages was of 4.2%. Notwithstanding an increase in salaries across all areas, particular increases have been observed in sectors that have become more regulated or for roles where talent has increasingly become more difficult to source. In fact, compared to the increase of 3.9% observed for roles in Finance, 4.9% in the salaries for jobs in Sales and Marketing and a 5.5% increase in IT, positions for Legal and Compliance saw the highest increase of 6.3%. This highlights the value attached to such positions in the light of sustained demand for highly competent and professional individuals. We also found a decrease in the starting salary points for a number of roles, possibly due to the engagement of third country nationals joining the Maltese work force.

Now that the pandemic is over, have you noticed a difference in the mobility of employees?

The mobility of employees that had decreased throughout the pandemic, seems to have picked up once again, particularly in companies that were less affected by the pandemic or positions which were and still are more in demand. This may have led to more competition for talent which will have impacted salaries for various positions.

What were the main outcomes of this year’s HR Developments Annual Survey?

One of the main findings of this year’s survey revealed how for 72% of respondents, their main HR challenge is salary demands, a figure that turned out significantly higher than the 56% mentioned last year. In fact, while the main challenge for most HR practitioners is going to be rising salary demands over the next months, retaining staff will be the most important strategic objective of the HR function. The pressure to retain staff appears to be a multifaceted issue of available talent, salary and also an issue of finding staff with the required skills and qualifications.

So, you will certainly agree that the HR function in companies has become even more challenging?

Indeed, employers and HR practitioners are facing four main challenges namely expectations for higher salaries, a demand for such higher salaries from employees and job applicants who do not necessarily have the appropriate skills that meet their requirements, a difficulty in attracting talent, and a difficulty in retaining staff. This may eventually lead to employers having to assess the sustainability of their salary structures. The lack of experienced and qualified staff and the lack of job applications also seem to be issues that are being faced on a regular basis.

Copies of the MISCO Salaries and Benefits Report 2022/2023 may be ordered by sending an email on [email protected]